Kuwait has become the latest country to ban cryptocurrency and virtual asset transactions. The Central Bank of Kuwait has issued a statement warning financial institutions and banks not to deal with any form of digital currency, citing concerns over the potential for money laundering and terrorism financing.
This move has sent shockwaves through the global cryptocurrency community, as Kuwait was previously seen as a country with a growing interest in blockchain and cryptocurrency.
“It is completely forbidden to use virtual assets as a payment method or to acknowledge them as a decentralized currency in the State of Kuwait; as a result, you must refrain from carrying out any transactions in which virtual currencies are used as a payment method or payment instrument that fall under the purview of this ban.” CBK said in their statement.
The CBK reiterates that crypto-assets, sometimes known as crypto “currencies,” cannot be compared to actual currency despite the noticeable rise in requests for investment and trading in them.
CBK cautioned against the investor craze surrounding digital assets, saying that they cannot be equated to actual money.
CBK concern: Digital Currencies pose a Threat to Global Financial System
The CBK, like the majority of banking regulators, thinks that digital currencies are dangerous for the world’s financial system.
This is due to the fact that “transactions can be conducted through shady/illegal wallets or organizations, which could lead and steer people’s funds outside of the protections of recognised trade systems and norms.
Many central banks around the world are considering the possibility of launching their own digital currencies due to concerns about the volatility and risks associated with cryptocurrencies.
