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Kuwait Imposes Ban on Crypto Transactions and Mining

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The market supervisory authorities in Kuwait have jointly issued guidance on the use and recognition of virtual assets in the country, specifically the issue of virtual assets as a means of payment and their recognition as decentralized currency.

The July 18 circulars from the Central Bank of Kuwait (CBK), the Capital Markets Authority (CMA), the Ministry of Commerce and Industry (MOCI), and the Insurance Regulatory Unit ordered a restriction on transactions where digital assets, including crypto, are used as a settlement instrument.

In addition to explicitly prohibiting the use of assets as payment tools, the Middle East jurisdiction also outlawed mining of cryptocurrencies owing to their lack of legal status and government backing. Sources familiar with the developments also said that the local regulatory authorities have conducted awareness campaigns to educate the public in a bid to mitigate the risks associated with dealing in digital assets.

The financial watchdogs further cautioned that no licenses had been granted to local entities providing virtual asset services and put restrictions on the provision of licenses for such services to individuals or entities. The decision to enforce the ban took into consideration the findings of an assessment carried out by the National Committee for Combating Money Laundering and Financing of Terrorism on implementing Financial Action Task Force (FATF) guidelines meant to curb money laundering.

Worth noting, the latest communication excluded securities and other financial instruments which are currently regulated by the CMA and the CBK.

Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.