• Kuwait’s Capital Markets Authority issued a circular to clamp down on crypto activities in the country.
• The new circular bans the use of crypto assets as a payment method and as a form of investment, and prohibits digital coins from being treated as a decentralized currency.
• It also bars companies from providing crypto-related services and forbids its residents from engaging in all crypto-mining activities.
Middle Eastern Country Officially Bans Crypto Investments, Payments and Mining
The financial regulator of a petroleum-reliant economy in the Middle East recently released a new circular to restrict cryptocurrency activities within the nation. Issued by Kuwait’s Capital Markets Authority on Monday, it bans the utilization of virtual assets for payments and investments, treats them as anything other than decentralized currencies, and prevents businesses from offering any related services. In addition, it likewise disallows citizens from engaging in any type of mining operations involving digital coins.
Objective Behind Ban
The prohibition is part of an effort to follow through with FATF (Financial Action Task Force) recommendations designed to halt money laundering and terrorist financing through cryptocurrencies. Furthermore, this measure was determined after conducting research by Kuwait’s National Committee for Combating Money Laundering and Terrorist Financing.
Exemptions From Ban
Though these regulations are widespread across industries within Kuwait, there are specific exemptions that apply to certain securities regulated by both the Central Bank of Kuwait as well as additional securities or financial instruments regulated by their Capital Markets Authority.
Implications Of Restrictions
The newly imposed restrictions will have serious implications on businesses operating within Kuwait who may have previously relied on cryptocurrency transactions or payments for goods or services rendered. Furthermore, individuals residing in the nation can no longer partake in cryptocurrency mining operations which were once deemed legal under prior regulations.
State Of Cryptocurrency In The Middle East
These recent developments come at an interesting time when many other nations throughout the Middle East are beginning to explore options regarding blockchain technology and virtual asset adoption into their economies such as Bahrain’s central bank launching their own national digital currency pilot program last month or Saudi Arabia announcing plans to create their own regulatory framework based off current international standards set forth by FATF earlier this year.
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