Cryptocurrency Trading Is Officially Illegal In Saudi Arabia

Authorities in Saudi Arabia have emphasized that it is illegal to trade in cryptocurrency in the country.

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Authorities in Saudi Arabia have emphasized that it is illegal to trade in cryptocurrency in the country.

The official reminder to all citizens follows a series of crypto-related promotions that target virtual currencies. The stern notice comes in the wake of a number of claims by some websites that they are authorized to operate in the country.

It’s only recently that Saudi Arabia made known its stance on the issue of cryptocurrency trading. The government’s take is that crypto trading is illegal, and went as far as creating a committee tasked with enforcing the ban.

The committee is headed by the Capital Market Authority and draws membership from representatives of key ministries like Interior, Information, and that of Trade and Investment.

Also represented is the country’s regulator-the Saudi Arabian Monetary Agency (SAMA).

No authorization granted

The authorities, through the committee, have maintained that no single party or individual has been granted the license to offer cryptocurrency trading services.

Reports in the country’s media say that officials have blasted contrary claims as incorrect, reinforcing the Kingdom’s earlier ban on these activities.

Cryptocurrency Trading is Risky

Like many other governments around the world, officials in the Arab nation have cautioned citizens about crypto trading, terming it risky.

According to the standing committee, several factors make investing in bitcoin and other cryptocurrencies very risky. The warning takes into account the possibility of investors losing all their money.

Such risks come from factors like a highly volatile market, increased exposure to potential fraud and scams. There’s also the possibility of investors engaging in contracts that cannot be enforced within the law.

The committee also pointed out that trading in cryptocurrency falls outside the government’s supervisory role. It also pointed out that the sector was likely to support illicit activities like money laundering.

At the moment, the authorities are working towards finding ways of reducing proliferation of dubious sites. Officials have also stated that they are targeting forex trading that may be taking place on unregulated sites.

SAMA has also urged citizens to seek clarification concerning any given entity that claims to be licensed.

The prohibition on crypto trading is also being implemented in other Arab nations. Most notably, Egypt’s Grand Mufti endorsed a ban on all cryptocurrency trading. The reason was that it is against Islam as well as fraudulent.

Saudi Arabia supports Blockchain Technology

It appears the Saudi Arabia government wants to stamp out crypto trading but is not opposed to the development and use of the underlying blockchain technology.

For instance, February saw the Saudi Arabian bank piloting the use of Ripple (XRP)’s technology in money transfer. The Saudi bank utilized the Ripple’s protocol in facilitating transactions between smaller banks in Saudi Arabia and Jordan.

The Central Bank of Saudi Arabia was also among the very first to secure a partnership with Ripple. In the deal, banks within the country would use Ripple’s xCurrent to improve their remittances and payments infrastructure.

The encouraging trend also saw the signing of a partnership between IBM and Riyadh Municipality. The deal signed on July 11, 2018, is aimed at facilitating the use of blockchain technology in various administrative and economic sectors within the municipality.

It’s interesting to see how far adoption of blockchain technology will be supported amid the ban on bitcoin and crypto trading.

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