Considering the popularity of Bitcoin towards the end of 2017, this year has not been one of great achievements. As the digital currency markets are experiencing consistent declines, regulatory pressures are building up in the industry and the results have mostly been negative. The newest addition to the list of unfriendly crypto countries is Saudi Arabia where Bitcoin trading has now been declared illegal.
Saudi Arabia Declares Bitcoin Illegal
The Standing Committee for Awareness on Dealing in Unauthorized Securities Activities in the Foreign Exchange Market in the Kingdom of Saudi Arabia has recently decided against Bitcoin and declared Bitcoin trading in the country illegal.
The standing committee is composed of Saudi Arabian Monetary Authority (SAMA), which is the central bank of the Kingdom of Saudi Arabia; the Capital Market Authority; and various government ministries, including the Ministries of Interior, Commerce, Media, and Investment. As stated in the announcement, the high risk associated with Bitcoin trading had led the committee to this decision.
The government body, which was formed by a supreme decree, was assigned the task of looking into unauthorized trading in the forex market. The entity is to look into any investments in the forex and cryptocurrency sector and report them to the authorities. It is also responsible for reducing the level of participation of forex and cryptos in the market.
The special committee has not defined any penalties to be imposed on persons found to be involved in the illegal market. For now, the authorities are warning the citizens to avoid trading in digital coins, signing contracts or sending money to an unknown party.
How Have Markets Reacted?
The announcement of the ban has had no significant impact on Bitcoin trading in the country as of now. BitOasis, the first Bitcoin exchange in the Middle East, has not delisted Saudi Arabian markets. It had some issues with fiat withdrawals in May because of problems with a banking partner. The problem has been resolved now.
The important thing is that the ban is not targeted toward Bitcoin alone. It broadly mentions cryptocurrencies, which means that coins like Ripple, Ethereum and Bitcoin Cash, among others, are also banned in the country. This blanket ban comes at a time when SAMA is working on a cryptocurrency to facilitate cross-border payments with the United Arab Emirates. In fact, Ripple’s xCurrent software is also in use at the bank. The ban could be a result of the government’s intention to ban everything it cannot control.