Dubai: The regulatory authorities in Kuwait, including the Central Bank, the Capital Markets Authority, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit, have imposed a ban on all virtual currency transactions.
According to reports, official circulars were issued prohibiting the use of virtual assets as means of payment, recognizing them as a decentralized currency in Kuwait, and refraining from conducting transactions that use virtual currency as a payment method.
The new regulation comes following the findings of a study by the National Committee for Combating Money Laundering and Financing of Terrorism. The circulars also stipulate that it is imperative to refrain from providing any type of services related to virtual assets to customers, or to issue or grant any individual or legal entity in Kuwait a license to provide virtual asset services for their benefit, or on behalf of others. Notably, no such licenses have been previously issued. The ban extends to all activities related to virtual currency or asset mining.
Sources have warned about the risks associated with dealing in virtual assets, especially cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, and others, which do not have legal status and are not issued or supported by any government. The volatile nature of these currencies, driven by speculation, can lead to sharp price declines and pose significant risks for investors.
Meanwhile, the Central Bank of Kuwait has listed 46 transactions and procedures related to companies, banks, and entities under its supervision that require the bank's approval before execution. The Central Bank has also asked the Ministry of Commerce and Industry to adhere to the agreement to harmonize the names and activities of companies in accordance with the United Nations' classification of economic activities. The bank has emphasized that activities such as practising the business of conventional, Islamic, or industrial banks can only be added to the commercial license of joint-stock companies.
As per sources from the Ministry of Commerce and Industry, all companies and commercial establishments operating under Law No. 111/2013 must reconcile their activities to align with international economic activities and the unified guide for the classification of economic activities in the Gulf Cooperation Council.
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