No, no and no. While some countries like the United Statescontinue to procrastinate and that others, like Singapore, have decided to officially regulate certain practices related to crypto, there are still states that refuse en bloc anything directly or indirectly related to crypto. THE Kuwait definitely belongs to the latter category, and the national regulator has just confirmed this with a circular on this subject. There Capital Markets Authority (CMA) persists and signs, and don’t want crypto for its nationals. Head north to the Persian Gulf to see what’s wrong with digital currencies.
Means of payment, investment or mining: the little monarchy says no to cryptos
In a circular published earlier this week, the CMA is rather clear and does not cut corners by confirming “the absolute ban on all crypto-related activities”. It’s actually hard to make it any clearer.
In the document, we can read black and white that the use of crypto as a means of payment is strictly prohibited. Similarly, it is forbidden to consider virtual assets as an investment, and therefore to offer them to its customers. Moreover, no license of this kind will be granted to a natural or legal person to provide this type of service. Finally, mining activities are also included in this “absolute prohibition”.
The only exception seems to relate to financial securities already regulated by the Central Bank of Kuwait and by the CMA, but not much detail on this subject. For the rest, it’s no, no and no! At the time of justify his choices, it is always the same reasons that are put forward by the authorities, namely the user protection against a highly speculative sector and the fight against money laundering.
The circular recalls in passing the requirements of the Financial Action Task Force (FATF) in the fight against money laundering, but also in the fight against terrorism. In conclusion, the CMA also warns his fellow citizens against the purchase of such virtual assets through international platformsand recalls the possible proceedings to which offenders are exposed in the event of non-compliance with this circular.
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Kuwait is an exception in the Persian Gulf
But more important than respect for the law, it is above all a question of protecting potential investors against themselves. Indeed, these crypto-assets are not far from evil incarnateaccording to the CMA:
“Clients should be aware of the amount of risk that may arise from trading virtual assets (…), especially cryptocurrencies, as they have no legal status and are not issued or endorsed by any government. Moreover, they are not linked to any asset or issuer. And prices are still driven by speculation, which exposes them to a sharp decline. »
There unfavorable position of this small state on the Arabian Peninsula denotes slightly from the rest of the sub-region, with which other countries seem more inclined to take advantage of the benefits that cryptocurrency offers. Dubai is, for example, well on its way to becoming a crypto stronghold. And the United Arab Emirates as a whole are very interested in the subject.
It now remains to see how the Kuwait will apply this law, and how long it will take the authorities to reverse this rather drastic decision. This all the more so since with all the oil extracted in the country, Bitcoin could, for example, be used to limit waste energy. But apparently, they don’t know yet.
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