Can the Government Ban Bitcoin?

On April 5, 1933, a month after taking office, President Franklin Roosevelt signed Executive Order 6102. It required every person in the United States to deliver their gold coin, gold bullion, and gold certificates to a Federal Reserve bank on or before May 1.¹ A person could keep up to $100 in gold coin, and collectors could keep rare coins. Everything else had to be handed in, in exchange for paper money at the official price of $20.67 an ounce.³ The penalty for refusing was a fine of up to $10,000, or up to ten years in prison.

On January 30, 1934, the Gold Reserve Act set a new official price: $35 an ounce.² The people who had obeyed the order had traded their gold for dollars at $20.67, and nine months later those same dollars bought about 41 percent less gold. Americans could not freely own gold again until President Ford signed a law restoring the right, which took effect at the end of 1974.²³ For four decades, the oldest money in the world was off limits to ordinary Americans.

So when people ask whether a government could ban bitcoin, the honest answer starts with this: governments have banned money before, and the ban worked. The real question is whether bitcoin can be banned the way gold was.

Why the Gold Ban Worked

Executive Order 6102 did not need to search every house in America. It only had to control the places where gold changed hands: the banks, the dealers, and the Federal Reserve. Once those doors were closed, a gold coin kept in a dresser drawer was still gold, but it had become something you could not legally spend, deposit, or sell at a fair price. Its usefulness as money ended at the edge of the drawer.

That is what a ban on a money usually looks like in practice. It does not destroy the money. It cuts the money off from the economy around it, and it works because a small number of institutions sit at every point where the money meets daily life.

The Same Doors, a Different Building

Bitcoin has doors like that too. Most people buy it through an exchange, pay for it from a bank account, and sell it back the same way. Mining companies run large buildings with large power bills, which makes them easy to find. A government can close every one of those doors inside its borders: it can order banks not to serve exchanges, shut down exchanges, outlaw mining, and make owning or using bitcoin a crime. Some governments have done most of these things.

What it cannot do is close the vault, because there is no vault. Bitcoin's record of who owns what is not kept in a building or on a company's servers. Full copies are kept by thousands of independent computers called nodes, each of which holds every transaction since January 2009 and checks every new block against the same rules. In late October 2026, a public crawler counted about 18,600 nodes that accept outside connections, and that count leaves out the many that never accept them.⁴ They run in homes, offices, and data centers around the world, owned by people who have never met.

To switch Bitcoin off, a government would have to stop all of those nodes, in every country, at the same moment, along with every miner. Any node that survives can hand the complete history to anyone who connects to it, and the network picks up where it left off. No single government has that reach. A coordinated effort by many governments would face the same problem on a larger map.

The Biggest Test So Far

The closest thing to a real attempt came from China. In May 2021, the State Council's financial committee called for a crackdown on bitcoin mining and trading, and provinces that hosted large mining farms ordered them shut.⁵ That September, China's central bank and other agencies declared all cryptocurrency transactions illegal.⁶ China was then home to a large share of the world's bitcoin mining, and the miners had weeks to shut down or leave.

The effect on the network was immediate and visible. In the first half of May 2021, the computers securing Bitcoin were making about 178 quintillion guesses per second. By early July, that figure had fallen to about 91 quintillion, roughly half.⁷ For a few weeks, blocks arrived more slowly than the usual ten minutes. Then the network did what its rules tell it to do. On July 3, 2021, the mining difficulty adjusted downward by 27.9 percent, the largest drop in Bitcoin's history, and blocks returned to their normal pace.⁷

The miners who left China shipped their machines to other countries and plugged them back in. By January 2022, the network's computing power was back above where it had been before the ban.⁷ Researchers at the University of Cambridge also found something the ban was meant to prevent: China's measured share of mining fell to zero in July and August 2021, then rose to about 21 percent in data covering September 2021 through January 2022, which they attributed to mining that had gone underground.⁸ By October 2026, the network ran on more than five times the computing power it had before the ban.⁷

Through all of it, no past transaction changed, the 21 million limit did not move, and nobody outside China lost the ability to use Bitcoin for a single day.

What a Ban Can Still Do

It would be dishonest to stop there, because a ban that cannot shut down the network can still do real harm to the people who live under it. Chinese users lost legal access to exchanges. Miners sold equipment at a loss or moved it across the world. A government that wants to can make buying bitcoin illegal, tax it heavily, punish the people who use it, and require exchanges to hand over customer records. Because Bitcoin's ledger is public, coins bought through an exchange that collected your name and ID can be followed from there.

Bitcoin held with your own keys cannot be confiscated without those keys. But a government can still pressure the person who holds them, and bitcoin left on an exchange is only as safe as that exchange's standing with its regulators. "The network can't be shut down" and "a ban can't hurt you" are two very different claims, and only the first one is true.

A Switch Nobody Holds

There is another way to look at the same facts. A network that no government can switch off for its own critics is a network that no government can switch off for anyone. That cuts in every direction, including directions you may not like, and that is the point. Money that can be turned off for some people can be turned off for anyone, depending on who holds the switch. Bitcoin's design simply leaves no switch to hold, which makes it neutral in the way roads, electricity, and arithmetic are neutral.

Not every government has followed China's path. The United States went the other way: on March 6, 2025, it established a Strategic Bitcoin Reserve, funded with bitcoin the government already owned from forfeiture cases, and said it would not sell the bitcoin placed in it.⁹ A government that holds bitcoin in reserve has a stake in the network continuing to work.

The gold ban of 1933 was one step on a long road that ended in 1971, when the dollar's last link to gold was cut. Lesson 8 of the course takes up this question alongside the other common worries about Bitcoin, from crime to energy. Why governments have so often wanted control over what counts as money, and what that control has cost the people holding it, is where the free first lesson begins.