![Kuwait Enacts Ban on Virtual Currency Transactions](https://kuwaitconnect.org/wp-content/uploads/2023/07/vc.jpeg)
This decision was prompted by a study conducted by the National Committee for Combating Money Laundering and Financing of Terrorism.
Kuwait : Kuwait’s regulatory authorities, including the Central Bank, the Capital Markets Authority, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit, have jointly enforced a ban on all virtual currency transactions.
Official circulars have been issued to prohibit the use of virtual assets as a means of payment, classifying them as decentralized currencies within Kuwait. The circulars also advise against engaging in any transactions that involve the utilization of virtual currency as a payment method.
This decision comes in the wake of a study conducted by the National Committee for Combating Money Laundering and Financing of Terrorism. As per the circulars, it is strictly forbidden to provide any services linked to virtual assets to customers. Additionally, no individual or legal entity in Kuwait shall be granted a license to offer virtual asset services on their behalf or on behalf of others. It is important to note that no such licenses have been issued in the past. The ban encompasses all activities related to virtual currency or asset mining.
Various sources have raised concerns about the risks associated with dealing in virtual assets, particularly cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, and others. These cryptocurrencies lack legal status and are not supported or issued by any government. The volatile nature of these currencies, driven by speculation, can lead to significant price fluctuations and present substantial risks for investors.
Correction:
The Central Bank of Kuwait has taken significant steps to regulate transactions and procedures concerning companies, banks, and entities under its supervision. The bank has compiled a list of 46 such transactions, which now require prior approval from the Central Bank before execution.
Additionally, the Central Bank has urged the Ministry of Commerce and Industry to follow an agreement aimed at harmonizing the names and activities of companies in accordance with the United Nations’ classification of economic activities. The objective is to ensure consistency and compliance with international standards.
The Central Bank has specifically emphasized that businesses involved in conventional, Islamic, or industrial banking can only be added to the commercial license of joint-stock companies.
According to reliable sources from the Ministry of Commerce and Industry, all companies and commercial establishments operating under Law No. 111/2013 are required to align their activities with the international economic activities classification and the unified guide for the classification of economic activities in the Gulf Cooperation Council. This move aims to streamline business practices and promote coherence within the region’s economic landscape.