Digital currencies or cryptocurrencies are a new class of virtual assets that allow borderless transactions. And because of this, plenty of nations and companies eye it for business—best example is the Middle East. At large, the transcontinental region has proven that it’s difficult to handle cryptocurrencies when there are states banning crypto trading.
Meanwile, cities like Dubai and Turkey are slowly warming up to this technology while going over adoptions and researches. Let’s take a look at other countries and their crypto relationships in the Middle East:
BAHRAIN
Legalities for Cryptocurrency: On Process
Willingness to Use Blockchain: Yes
Bahrain is an Arab constitutional monarchy in the Persian Gulf and has been the center of major trade routes since antiquity. The country is taking a positive approach towards the usage of cryptocurrency. In September last year, the Bahrain Central Bank (BCB) announced the creation of “Regulatory Sandbox, a tool to facilitate and regulate the Fintech industry, including Bitcoin and blockchain transactions.
Abdulhussain Mirza, Bahrain’s minister of electricity and water affairs, shared his utmost support for the technology by saying: “Technologies such as blockchain take us a huge step forward in finding a secure way to facilitate transactions…Blockchain’s ability to protect user’s data is a true mark of progress, especially due to the fact that it can be applied in different companies from different industries including cyber security.”
TURKEY
Legalities for Cryptocurrency: On Process
Willingness to Use Blockchain: Yes
Cryptocurrencies are very popular in the country. Based on a report from the ING Bank, a Dutch multinational banking and financial services, 18 percent of the country’s population own cryptocurrencies—a far cry from the United States’ estimated share of 8 percent. The probable source of the people’s interest in cryptocurrency was the annual rising inflation rate of the Turkish lira, a currency crisis that the government has been dealing with for years. The BTC trade volume in exchange for Turkish lira reportedly rose from 327,295 to 759,026 between the week ending on July 7 and the one ending August 11.
The country has an unclear regulatory measure for the blockchain technology, but the state allowed the Istanbul Blockchain and Innovation Center (BlockchainIST) to introduce a university-level blockchain center.
QATAR
Legalities for Cryptocurrency: Banned/Illegal
Willingness to Use Blockchain: Yes
All transactions concerning cryptocurrencies are banned in Qatar. The Qatar Central Bank (QCB) published a statement addressing all banks to ban Bitcoin trading. Penalties will be imposed for those who will not follow the protocol. QCB further argued that Bitcoin and cryptocurrencies are illegal because “there is no commitment from any central bank or government in the world to exchange their value for money issued and cleared for payment for the goods traded globally or for gold.”
Despite the country’s negative view towards cryptocurrencies, Qatar welcomes blockchain. In fact, they will host a blockchain conference in Doha, encouraging local blockchain-focused startups to open their business.
SAUDI ARABIA
Legalities for Cryptocurrency: Banned/Illegal
Willingness to Use Blockchain: Yes
The Kingdom of Saudi Arabia views cryptocurrencies as illegal. The Saudi Arabian Monetary Authority (SAMA) published a statement warning citizens against trading virtual currencies, it read: “The committee assured that virtual currency including, for example, but not limited to, the bitcoins are illegal in the kingdom and no parties or individuals are licensed for such practices. The committee warns all citizens and residents about drifting after such illusion and get-rich scheme due to the high regulatory, security and market risks involved, not to mention signing of fictitious contracts and the transfer of funds to unknown recipients/entities/parties.”
Like Qatar, Saudi Arabia is open for more ways to improve their country using technology. The Kingdom is experimenting with Blockchain through its Saudi Vision 2030 program, a project targeting long-term economic development.
IRAN
Legalities for Cryptocurrency: On Process
Willingness to Use Blockchain: Yes
With the economic sanctions imposed by U.S. President Donald Trump, Iran is slowly unveiling the use of cryptocurrency. Visa and Mastercard are not operating in the country and its local currency is facing a high inflation rate. With that, Bitcoin gained massive popularity in May where it was reported that over $2.5 billion had been exchanged for Iranian Rial.
Iran’s Information and Communications Technology (ICT) ministry and the National Library signed a memorandum of understanding (MOU) to use blockchain to digitize the country’s archives. They want to explore the underlying technology of Bitcoin and blockchain.
IRAQ
Legalities for Cryptocurrency: Banned/Illegal
Willingness to Use Blockchain: No
Bitcoin is banned in Iraq. Last December, the Central Bank of Iraq (CBI) and its information director Aysar Jabbar, reportedly published a statement saying: “this currency [Bitcoin] involves several risks that may result from circulation, especially with regard to electronic piracy and fraud, although there is no popularity within Iraq.” Anyone found using cryptocurrencies may be persecuted.
KUWAIT
Legalities for Cryptocurrency: Banned/Illegal
Willingness to Use Blockchain: No
Any type of cryptocurrency and blockchain technology is banned in Kuwait. The country and all the banks under the state prohibits the citizens from using them because they cannot regulate it. The Ministry of Finance reportedly said that Bitcoin trading is out of their control and “the proceeds of Bitcoin that are wired from abroad to Kuwait are considered as illegal and unclean money, because the Kuwaiti law does not consider those currencies.”
UNITED ARAB EMIRATES
Legalities for Cryptocurrency: On Process
Willingness to Use Blockchain: Yes
It is still unclear whether the UAE will officially and openly allow cryptocurrency trading. In October of last year, the state released regulatory guidelines concerning Initial Coin Offerings (ICO) and cryptocurrencies—both are recognized as securities and commodities respectively.
In addition to the country’s warm welcome towards cryptocurrencies, the UAE has also been going over the use of blockchain technology. In 2016, Dubai launched a city-wide blockchain strategy project aiming to become the first blockchain-powered city by 2020.
EGYPT
Legalities for Cryptocurrency: Banned/Illegal
Willingness to Use Blockchain: Yes
This year, Egypt’s Grand Mufti Shawki Allam confirmed that Bitcoin is forbidden under the Sharia Law because crypto trading may lead users to “fraud, betrayal, and ignorance”. After this, The Egyptian government published a statement that they do not support the use of cryptocurrency either, and any resident dealing with these can fall under legal liability.
Egypt is more positive towards the use of blockchain. Earlier this year, the country launched its first blockchain-focused incubator called NU TechSpace. They teamed up with IBM, Novelari, and ZK Capital to come up with new blockchain-backed business models.bi
CYPRUS
Legalities for Cryptocurrency: Mixed Views
Willingness to Use Blockchain: Yes
According to the Central Bank of Cyprus, “Bitcoin is not illegal, but at the same time, neither is it subject to control or regulation”. There are no laws or jurisdictions banning the use of the coins, but there is also no clear regulatory measure concerning transactions and tradings. But the country is now expecting president Nicos Anastasiades to meet with Bitcoin Cash (BTC) advocate Roger Ver.
Cyprus is home to Cyprus Blockchain Technologies Ltd., a nonprofit organization founded as a collaboration among academic institutions, and University Blockchain Research Initiative, a school donated by Ripple and the first accredited university in the world to accept Bitcoin payments.
ISRAEL
Legalities for Cryptocurrency: Taxed
Willingness to Use Blockchain: Yes
Israel does not recognize cryptocurrencies as an actual currency, but they are not banned in the country and some view them as assets. The Israel Securities Authority (ISA) Committee for the Examination and Regulation of ICOs published a report saying that these coins are “designed to dispel uncertainty and strike a balance between technological innovation and the protection of the investors.”
Israel supports blockchain-based organizations within its walls. It allows the operation of CoaliChain, an interactive political platform that promotes the policies of an open government and eliminates the communication gap between the elector and the elected.
JORDAN
Legalities for Cryptocurrency: Banned/Illegal
Willingness to Use Blockchain: No
Cryptocurrency trading, especially with bitcoins is banned in Jordan. The Central Bank of Jordan’s (CBJ) warned locals that these coins are not legal tender “and there is no obligation on any central bank in the world or any government to exchange its value for real money issued by them not backed by underlying international commodities or gold.” Furthermore, the country hasn’t published any statement or press release regarding blockchain technology.
OMAN
Legalities for Cryptocurrency: Allowed But With Caution
Willingness to Use Blockchain: Yes
Cryptocurrencies are not entirely banned in Oman, but the Central Bank of the country will hold no liabilities regarding its trading and transaction. The board has warned and cautioned the public that the government is not responsible for any losses from investments or any other businesses.
Regardless of the gray areas with cryptocurrencies, Oman is active when it comes to blockchain. It has a government-owned entity called Blockchain Solutions and Services Co. (BSS) working with Oman Banks Association to develop a framework for the nation’s digital advancement.
PALESTINE
Legalities for Cryptocurrency: On Process
Willingness to Use Blockchain: No
Cryptocurrency transactions are allowed in the country. But more than that, the head of the Palestine Monetary Authority (PMA), Azzam Shawwa, revealed that the nation is planning to launch the country’s own virtual currency called “Palestinian pound” within five years. This will serve as a safety net for the country’s unstable currency. At the moment, its residents are relying on the U.S. dollar, Euro, Israeli Shekel, and Jordanian Dinar.
LEBANON
Legalities for Cryptocurrency: Prohibited
Willingness to Use Blockchain: No
Lebanon is the first country in the Middle East to express its distrust for cryptocurrencies. They issued a public warning in December 2013 stating that cryptocurrency trading are volatile, and they affect AML and KYC protocols. Last 2017, Lebanese central bank Banque du Liban (BDL) Governor Riad Salameh even claimed that cryptocurrencies are just “commodities” that are prohibited and unregulated.
