Kuwait’s government has hardened its stance against cryptocurrencies, prohibiting the use of digital assets for payments or investments in a bid to clamp down on money laundering and terrorist financing.
Crypto Payments, Investments, And Mining Banned In Kuwait
Kuwait has made virtually all operations involving cryptocurrencies illegal.
Kuwait’s Capital Markets Authority issued a circular on the oversight and issuance of virtual assets in the country on July 18. In the said circular, the regulator forbids carrying out transactions that involve using cryptocurrencies as payment tools. Kuwait has also imposed an “absolute ban” on domestic digital asset mining operations and investments and denied recognition of crypto as a decentralized currency.
Moreover, the CMA bans local regulators from giving any licenses permitting companies to offer crypto-related services as a commercial business. The restrictions seek to comply with the Financial Action Task Force’s (FATF) global recommendations for crypto assets and emerged after an examination into the industry by the National Committee for Combating Money Laundering and Financing of Terrorism, according to the regulator.
Meanwhile, securities and other financial instruments regulated by the Central Bank of Kuwait and the Capital Markets Authority are excluded from the ban, the circular indicates.
Regulator Warns of Cryptocurrency’s Risks, Cites Unregulated Status
The Kuwait regulator claims that cryptocurrencies “don’t carry a legal status and are not issued or supported.” CMA further asserted that crypto “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.”
With Bitcoin not backed by a central authority, the regulator has urged consumers to exercise caution and remain aware of the risks of the digital currency.
Local reports reveal that the CMA’s crypto prohibitions are part of a new cross-sectoral cryptocurrency ban involving a slew of supervisory powers in Kuwait. The Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit have all reportedly issued similar circulars.