Jordan Cryptocurrency Laws Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
In Jordan, the Government’s unfavorable attitude towards cryptocurrency has fostered a hostile legal environment for the new technology. The Central Bank of Jordan (CBJ) enacted legislation that prohibits all banks, currency exchange companies, financial entities, and payment service providers from facilitating any cryptocurrency transactions, including Bitcoin. Consequently, cryptocurrency trading is virtually prohibited under the laws of Jordan.
In addition to the prohibition, the CBJ issued an official warning about the risks of cryptocurrency trading. First, the CBJ emphasized that cryptocurrencies do not qualify as legal tender in Jordan. Second, the CBJ noted that “there is no obligation on any central bank in the world or any government to exchange its value for real money issued by them nor [is cryptocurrency] backed by underlying international commodities or gold.” Essentially, the CBJ is arguing that there are no real assets underlying the value of cryptocurrency.
Third, the CBJ warned that cryptocurrencies are highly volatile and face a high risk of devaluation. For example, in April 2021, the price of one Bitcoin was approximately $64,000. By May 2021, the price of a single Bitcoin dropped to $38,000. Thus, if a Jordan citizen invested in cryptocurrency in April, then they would have lost have of their investment less than two months later.
Four, the CBJ warned that cryptocurrencies face high risks of hacking and other financial crimes. For example, a cryptocurrency exchange named EXMO was hacked in 2020. Consequently, EXMO investors lost approximately $52 million in cryptocurrency assets. Finally, the CBJ warned that cryptocurrency offers no consumer protection measures. Consequently, investors that lose funds to hacking attacks, like the EXMO traders, have no viable methods of recovering the stolen funds. Furthermore, finding the identity of hackers is difficult because cryptocurrency is largely anonymous. As a result, the EXMO traders have no legal recourse to redress their financial injuries.
For all these reasons, the CBJ warned investors in Jordan to abstain from cryptocurrency investments and banned financial institutions operating in Jordan from trading cryptocurrencies. Therefore, Jordan does not provide a favorable legal environment for cryptocurrency investors.
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
