Kuwait does not recognize virtual currency Bitcoin

Kuwait does not recognize virtual currency Bitcoin

Kuwait does not recognize virtual currency Bitcoin

Kuwait’s Ministry of Finance does not recognize the virtual currency ‘Bitcoin’ and forbids its trading in the Kuwaiti financial institutions.

Both the Ministry of Finance and the Central Bank of Kuwait cannot punish trading because they do not recognize it, not to mention it is a virtual currency used for ‘exchange’ without a central authority or intermediary.

The Central Bank of Kuwait prevents the banking sector and the companies under its control from trading in Bitcoin, especially after the demand for Bitcoin significantly shot up recently.

The prohibition of the Central Bank in this regard includes acceptance of its use for payment or opening portfolios as well as mediation between the parties.

The sources added the encrypted electronic currency is not guaranteed by the banking system or the Central
Bank and the Central Bank had earlier asked the Ministry of Commerce and Industry to take the necessary measures to inform customers of the risks of this currency.

Earlier, Reserve Bank of India (RBI) also warned investors against betting on bitcoin and other cryptocurrencies. Last month, finance minister Arun Jaitley said India does not recognize virtual currency as legal tender. Earlier this year, a committee set up by his ministry had reportedly recommended banning cryptocurrencies over fears that they could be used to launder money and perpetuate frauds.

Meanwhile, Kuwaiti banks have recorded growth in credits and deposits over the last three years but the rate of growth differs from one bank to another, and reflected on the market shares. As per a recent study conducted by the daily, financial indices within the period of 2014 to 2017 indicate the growth rate of credits and deposits of Islamic banks exceeded those of their conventional banking counterparts.

The situation has reflected on the Kuwaiti loan and financial market shares, while the Islamic banks have been covering larger percentages every year.