Cryptocurrency trading has recently been deemed illegal in Saudia Arabia. A committee consisting of the Capital Market Authority (CMA), Ministry of Ministry of Interior membership, Ministry of Media, Ministry of Commerce and Investment and Saudi Arabian Monetary Authority (SAMA) has released a statement where they, among other things, has deemed virtual currencies illegal.
In it, the committee says that there are no parties in the Kingdom that are licensed to trade virtual currencies such as Bitcoin and warns all their citizens and residents of trying to chase after them and other “get-rich schemes”.
The committee lists things such as the high regulatory and market risks involved, the low security for investors which includes the signing of fictitious contracts and transfer of funds to unknown entities as a reason for the ban. While there is no mention of penalties for breaking the rule, the committee said that they are working with relevant parties to reduce marketing and trading in cryptocurrencies.
However, while Saudi Arabia seems to be banning cryptocurrencies, blockchain technology itself has been adopted in Saudia Arabia. Ripple and the and Saudi Arabian Monetary Authority (SAMA) offered a pilot program for Saudi banks, which was signed in February this year. By doing so, Saudi Arabian banks are hoping to improve their payment infrastructure using Ripples payment system xCurrent.
The partnership with Ripple is not the only time Saudi Arabia has made partnerships with blockchain companies. In May, The Saudi Ministry of Communications and Information Technology hosted a blockchain bootcamp with ConsenSys as an effort to support technological development.
Worth noting, however, is that this is the first central bank in the world that has promoted the use of blockchain technology, so the program itself is very unique.
It seems that the line Saudi Arabia is taking is that they will promote blockchain technology even on a governmental level, but hinder any sort of trading or marketing of cryptocurrencies.
Image Source: “Flickr”
Bought my first Bitcoin in 2013, but when Ethereum was released in 2015 I decided to make cryptocurrency my biggest focus in life since I realized what impact smart contracts will have on society. It has since then been my biggest passion in life and it usually takes up most of my waking hours. I like to program and have followed and interacted with what happens in blockchain pretty much constantly during this time, and spent countless hours researching this amazing technology. I believe this is why I have a good technical understanding of all the different blockchains and its concepts, which is something I try to do my best to spread while working at Toshi Times.