Kuwait bans cryptocurrency trading for financial institutions

Is Bitcoin legal in Kuwait? The authorities deny to recognize the cryptocurrency, yet Kuwait bans cryptocurrency trading for financial institutions. Will the country issue any regulations for the Bitcoin in the future?

20 December, AtoZForex The Ministry of Finance in Kuwait has supposedly refused to recognize Bitcoin. In addition, the authorities in Kuwait have also banned financial institutions from trading the cryptocurrency.

Kuwait bans cryptocurrency trading for financial institutions

One of the online sources have stated that the Ministry and the Central Bank of Kuwait have prohibited the banking sector and firms from trading in Bitcoin. This move from Kuwait officials follows the crazy Bitcoin price rally during the current year.

One of the sources also has stated that both the central bank and ministry do not have the authority to punish trading. This is due to the fact that, apparently, they do not recognize the cryptocurrency. As a matter of fact, there would not be any regulatory actions since Bitcoin trading is carried out online, which makes it out of control of any supervisory authority.

Taking the above into consideration, the lack of the support by the banking system pushed Kuwait officials to warn investors about the risks involved in investing in Bitcoin. Kuwaiti legislation does not restrain online trading of cryptocurrencies, as they fall under the e-governance laws, according to the online sources.

The same report stated that citizens of the country are currently at the “forefront of buying and selling bitcoins.” Yet, the transactions of Bitcoin that come from abroad to Kuwait are considered as illicit money. This is due to the fact that Kuwaiti law does not acknowledge cryptocurrencies. Following on this, the online reports note that people who trade Bitcoins can be questioned about the money and the source of money.

Bitcoin in Bahrain and UAE

Bahrain, a constitutional monarchy that shares the Persian Gulf with Kuwait, has a slightly softer stance in regards to Bitcoin. According to Bahrain’s Economic Development Board chief executive Khalid Al Rumaihi:

“We are open to Bitcoins.”

Moving further south, the UAE has been open to cryptocurrency markets since 2014. That time, one of the earliest Bitcoin exchanges, iGot, has been established there. Then, two years later, BitOasis was launched by a female Jordanian entrepreneur. The project is serving as a cryptocurrency wallet and exchange in Dubai.  Taking this into consideration, we can conclude that UAE has adopted a soft position in relation to the cryptocurrency market.

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