The Saudi government has outlawed using and trading in Bitcoin, citing the high risk and negative consequences in the cryptocurrency.
Saudi Arabia’s Monetary Agency (SAMA) warned against trading in digital currencies for “their negative consequences and high risks on traders as they are out of government supervision.”
SAMA continued that cyptocurrencies like Bitcoin “are illegal in the kingdom and no parties or individuals are licensed for such practices,” adding a warning to “all citizens and residents about drifting after such illusion and get-rich scheme due to the high regulatory, security and market risks involved, not to mention signing of fictitious contracts and the transfer of funds to unknown recipients/entities/parties.”
In January, Saudi Arabia’s chairman of the Capital Markets Authority Mohammed ElKuwaiz told Business Insider that a ban on cryptocurrencies was “unlikely.”
“Not unlike most other markets, the regulators in Saudi have been following developments with cryptocurrencies with great interest,” he said. “It is an emerging field and one would like to see any new field develop before jumping in.” ElKuwaiz said.
In February, SAMA, which acts as the central bank for Saudi Arabia, signed an agreement with Ripple to help banks in the KSA improve their payments infrastructure using xCurrent.
In April, Saudi Aramco launched its own oil-backed cryptocurrency, the AramcoCoin, billing it as “a digitized interest in equivalent reserve barrels of crude oil and is free from the external risk of governmental intervention affecting the valuation of fiat currencies or the extreme volatility faced by digital currencies due to rapidly changing supply and demand dynamics.”
