Kuwait is the most recent country to ban almost all transactions utilizing crypto like Bitcoin. The Capital Markets Authority (CMA), Kuwait’s top financial watchdog, released a circular on the oversight and issuance of virtual assets in the nation on July 18.

The Ministry of Commerce and Industry, the Central Bank of Kuwait, the CMA, and the Insurance Regulatory Unit have all jointly issued circulars to address the use and recognition of virtual assets in Kuwait.

The commitment to “absolute prohibition” on significant cryptocurrency use cases and operations, including payments, investments, and mining, was reaffirmed by the CMA in the circular.

Ban on Crypto Transactions By Kuwait

Kuwait’s regulator also forbids carrying out transactions in which cryptocurrencies are used as payment instruments or methods. The circulars forbid the use of virtual assets as a form of investment, which is a major component of them. The authorities stress the dangers of working with virtual assets and draw attention to their lack of legitimacy and support from the government.

Cryptocurrencies were singled out by the regulator, who claimed that they “don’t carry a legal status and are not issued or supported.” According to the CMA, “It is not linked to any asset or issuer, and the prices of these assets are always driven by speculation that exposes them to a sharp decline.”

The regulatory authorities emphasized that no business licenses have been issued in Kuwait for the provision of virtual asset services, and they firmly forbid issuing such licenses to either people or businesses. The circulars broaden their prohibitions to cover all domestic crypto mining operations.

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Kuwait’s new laws, according to the regulator, are compatible with the country’s efforts to combat money laundering and terrorism financing. The governor of Kuwait’s central bank, Basel Al Haroon, recently spoke with a representative of The Banker to discuss ongoing research into central bank digital currency (CBDCs) and the potential deployment of blockchain EKYC solutions.

In response to the growing interest in virtual assets and cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin, local regulatory authorities have launched public awareness campaigns. It aims to educate the public about the potential risks associated with the highly volatile nature of these assets and the lack of supervision or regulation within Kuwait.

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