A committee within the Saudi Arabian Monetary Authority (SAMA), the central bank of South Arabia has declared in a statement that Cryptocurrencies including Bitcoin are not legal in the kingdom and “no parties or individuals are licensed for such practices.”
In the statement released on August 12th, the committee puts out a warning for all the citizens and residents to not get attracted by “illusion and get-rich scheme(s).” The committee stated that the reason behind the step has been the involvement of high regulatory, security and market risks “not to mention signing of fictitious contracts and the transfer of funds to unknown recipients/entities/parties.”
The central bank of the country is responsible for regulating the other banks and financial institution operating in the country. It is responsible for issuing and controlling the supply of Riyal, the national currency of Saudi Arabia.
The Standing Committee for Awareness on Dealing in Unauthorized Securities Activities in the Foreign Exchange Market, the one behind issuance of the statement was created to keep a check on the foreign exchange trading in the country.
The committee comprises of representatives from different ministries of the government including Ministry of Interior, Ministry of Culture and Information, Ministry of Commerce and Investment, SAMA and is presided over by the Capital Market Authority. The committee came on the conclusion that the net benefit of cryptocurrencies falls short of the actual trouble the economy could face due to its trading.
Saudi Arabia is the first country that emerged in the complete opposition of cryptocurrencies and its trading, as even countries like China and India haven’t completely banned such tokens but made it difficult to trade and use.
Last year, the billionaire investor Prince Alwaleed bin Talal criticised Bitcoin saying that the cryptocurrency would “implode” eventually. While in an interview with CNBC, he stated that he doesn’t believe in Bitcoin as it’s not under the supervision of Federal Reserve or any other central bank.
Despite the statement from the committee, there are platforms allowing Saudis can trade and invest in digital currencies. Such platforms are claiming that they have received authorisation from the domestic authorities. However, in the backdrop of statement released, the claims seems nothing more than farcical attempt to gain customers and make profit.