Cryptocurrency adoption has steadily increased across several countries, and the crypto rave seems to be everywhere. Today, everyone knows someone who invests in cryptocurrency. This rise in crypto investment has drawn the attention of many national governments. While some countries have chosen to watch from the sidelines, other governments seek to jump into the crypto wave.
Many governments have taken a stand on cryptocurrencies in recent years, and the Middle East is one of them. The government statements have been a mixture of bans and regulations.
We will be taking a look at the Middle Eastern countries and their crypto regulations:
Countries That Have Opted for Crypto Regulation
United Arab Emirates (UAE)
Recently, the UAE was in the news for its plans to launch a federal crypto license for virtual asset service providers. This move aims to make the UAE’s business climate favorable for crypto investment. In addition, the other Emirates like Dubai and Abu Dhabi have started to regulate crypto assets fully. For example, Dubai has introduced legislation to regulate blockchain-backed security tokens. Equally, Abu Dhabi has a regulation for trading digital assets or providing services within that area.
Bahrain
The Central Bank of Bahrain (CBB) published regulations to govern crypto-asset services in 2019. As stated by the CBB, the regulation was issued to reduce the rate of illegality that is often conducted with cryptocurrencies. Under the regulation, crypto-asset service providers are expected to be licensed and are required to have a minimum capital before they can operate.
Countries That Have Banned Cryptocurrencies
Saudi Arabia
In 2018, the Saudi Arabian Monetary Authority (SAMA) announced its stance on virtual currencies. It clarified that unauthorized virtual currencies were illegal within Saudi Arabia and declared bitcoin trading illegal for banks. However, individuals can trade using exchanges like Rain, Binance and Kraken.
Qatar
Like Saudi Arabia, the government of Qatar clarified its position on cryptocurrencies in 2018. The Supervision and Control of Financial Institutions Division of the Central Bank declared that the institutional use of cryptocurrencies is illegal. Therefore, Qatar banks and other financial institutions are prevented from aiding crypto transactions. However, crypto trading by individual Qataris is not viewed as illegal.
Turkey
Last year, Turkey’s government passed a law that banned crypto as a means of payment. This law banned the use of cryptocurrency for purchasing goods or services. The reason behind this stand being heavy transaction risks often faced while using crypto.
What This Means
The position on cryptocurrencies in the Middle East is mixed. However, what is worthy noting is that in countries where cryptocurrencies are accepted and regulated, the regulation does not seem to affect the decentralized nature of crypto assets. This is a positive sign for further development of cryptocurrencies.
Conclusion
While the regulation of cryptocurrencies may be tricky given its decentralized nature, regulation could also go a long way in promoting crypto adoption for the benefit of citizens. So, more Middle Eastern countries need to realize that the way to go with crypto is not by banning it. But through appropriate regulation as cryptocurrencies are here to stay.
