Saudi Central Bank Bans Cryptocurrency
Saudi Arabia has issued warnings for its residents against investing any funds into crypto as stated by the kingdom’s central bank. The bank’s committee has highlighted the fact that BTC and cryptocurrencies pose risky consequences to investors and cannot be controlled by the kingdom’s government. Official authorities referred to the coins as virtual currencies.
Too Many Risks
As the authority body has stated, it warns the Saudi public against falling for malicious schemes and the notion that cryptocurrencies were an easy and fast way to get rich in regards to the risks associated with regulation, security and the market. Additionally, the body comments on the anonymity provided and how unreliable and threatening it may be.
The committee, created by royal order, as a means of cutting down on investments and foreign exchange trade as well cryptocurrencies, operates directly under SAMA, the Saudi Arabia’s central bank. The body consists of representative figures from the CMA, Ministry of Media and the investment ministry.
Saudi Arabia’s monetary authority took a different path in dealing with digital currencies and their founding technology, blockchain-tech. In 2018, the bank collaborated with Ripple to conduct tests and research on blockchain payments. Ripple’s XRP token is the third leading cryptocurrency by market cap. Created as DLT, blockchain introduces more cost-efficient transfers, facilitates the completion of deals and provides unparalleled transparency by monitoring all transactions and otherwise on its blockchain.
Countries throughout the Gulf have displayed mixed reviews towards digital currencies. Bahrain is among the most welcoming countries in the Gulf to accept and promote cryptocurrency investments and adoption. In July of this year, Bahrain’s central bank certified Stellar and its XLM coin as fully compliant with the country’s Sharia law.
The UAE, also on very close relations with Saudi Arabia like Bahrain, currently operates two crypto-related projects. DubaiCoin, currently acting as the first all Arab cryptocurrency and Alibabacoin, a startup that was a lawsuit target by another tech-enterprise in China called Alibaba claiming that the company was misleading its clients.