Saudi Arabia Considering Cryptocurrency Regulations, Ban Unlikely

  • Saudi regulators are monitoring the cryptocurrency market and pondering regulations
  • A cryptocurrency ban is unlikely

The intensely volatile and overheated cryptocurrency markets of late 2017 have drawn the attention of regulators across the globe. Saudi Arabia is the latest in a long line of nations taking a closer look at the space. While some regulators tried to outright ban cryptocurrencies, others merely imposed anti-money laundering (AML) and know your customer (KYC) requirements on businesses. In Saudi Arabia, regulators are seemingly taking a more cautious approach, in order not to stifle innovation.

Speaking to Business Insider, the chairman of Saudi Arabia’s Capital Markets Authority, Mohammed ElKuwaiz, revealed officials are paying attention to the cryptocurrency space. They haven’t acted yet, as they are taking steps not to hinder activity in cryptocurrency markets.

“We are still evaluating what our appropriate regulatory response should be. I think we are likely to come up with something very soon.”

Mohammed ElKuwaiz

Just like the rest of the world, Saudi Arabia was hit with a cryptocurrency craze late last year. According to CryptoCompare, bitcoin trading volume for SAR was hitting over 20 BTC per day last month.on peer-to-peer exchange LocalBitcoins..

Although cryptocurrencies aren’t as popular in the country as they are in South Korea and Japan, a number of crypto exchanges currently serve the kingdom’s residents. Among them are Paxful, which claims to have sold over 10,000 BTC in the country, and BitOasis, which also serves users in the rest of the Middle East and North Africa.

Per ElKuwaiz, the cryptocurrency field is still emerging, and regulators “would like to see any new field develop before jumping in.” That said, Saudi Arabia’s central bank has in the past worked with UAE’s (United Arab Emirates) central bank on a cross-border cryptocurrency.

Saudi Arabia’s “wait and see” approach to the cryptocurrency space and fintech is set to allow new startups to develop pilot projects around the sector. To support the initiative, regulators created a sandbox program. Per ElKuwaiz:

"Essentially, companies are issued a provisional license over a test and pilot period in order to test their ideas," he said. "After the pilot period, we can then jointly agree to fit it into the existing regulatory regime or build a regulatory regime around it."

The kingdom’s stance toward cryptocurrencies is revealed at a time in which India’s finance minister Arun Jaitly says cryptocurrencies are not legal tender in the country.

Coinbase Secures Rare E-Money License in Ireland

  • US-based crypto exchange Coinbase has obtained an e-money license in Ireland. 
  • Exchange calls Ireland a "burgeoning" crypto-economy and highlights Europe as a fast-growing market. 

US-based cryptocurrency exchange Coinbase is expanding its European operation following the obtainment of an e-money license in Ireland. 

According to the update published to Coinbase’s official blog Oct. 11, the exchange has been granted an e-money license for operation in the country. Coinbase is now one of just a few companies to hold such a distinction, which the exchange says will enable it to “expand our Irish operation and ultimately deliver a better product to customers across some of our fastest-growing markets.”

Coinbase first announced its foray into the Irish crypto marketplace at the end of last year, with the creation of an office in Dublin. The US-based exchange calls Ireland a “burgeoning” cryptoeconomy and says that Europe represents a “huge opportunity” for Coinbase’s continued growth. 

According to the blog post, 

The approval from the Central Bank of Ireland will now enable us to expand our Irish operation and deliver a better product to customers across some of our fastest-growing markets. It will also allow us to secure passporting for our customers across the EU and EEA.

Martin Shanahan, CEO of IDA Ireland--an agency responsible for attracting foreign investment into the country--congratulated Coinbase on obtaining the license and called the development an important milestone for Ireland’s pro-enterprise policy environment. 

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