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Bitcoin users have had to deal with their fair share of bad news in 2018. Now bitcoin users in the Middle East will have to deal with some more harsh news as the Saudi Arabian Monetary Authority (SAMA), which is the central bank of Saudi Arabia along with a group of several government ministries announced that bitcoin trading is now illegal in the country.
The announcement was made recently and the reasons for the bitcoin ban was put down to the high risk to traders and the negative consequences of bitcoin trading have forced the bank to declare it illegal.
The central committee that released the statement was formed by a supreme decree to look into unauthorized activity on the forex market. Besides SAMA, the committee has the country's Ministries of the Interior, Commerce, Media, and Investment as members, along with the Capital Market Authority (CMA).
The supreme decree has the committee looking into any investments in forex and cryptocurrency and reporting them to the authorities. It also has the responsibility of reducing their level of participation in the current market.
Accordingly, the committee has confirmed that bitcoin trading is illegal in the country of Saudi Arabia. It has not outlined any penalties or fines for those caught using bitcoin but just warned Saudi Arabian citizens of participating in cryptocurrency trading, as well as signing contracts and transferring funds to unknown parties.
Saudi Arabia Bans Cryptocurrencies
Despite the recent announcement, it seems that the bitcoin market is still active in the country though. BitOasis, which is the first bitcoin exchange in the Middle East and North Africa region, still lists Saudi Arabia as one of the regions where it operates. The company faced issues with fiat money withdrawals back in May. This was traced to an issue with its banking partner in the country. However, fiat money withdrawals have recently resumed.
Bitcoin is not the only cryptocurrency to take a hit in Saudi Arabia. The statement talks about cryptocurrency trading in general so other cryptocurrencies in the region are in hot water as well.
The irony of this blanket ban on the cryptocurrencies is that SAMA has recently started work on its own cryptocurrency to facilitate cross-border bank transfers. The bank also uses blockchain technology in its network via the xCurrent software, which is from the developer of Ripple. Blockchain technology is useful for money transfers, but it seems the Saudi Arabian government doesn't trust it when it is out of their control.
