Is cryptocurrency legal in Kuwait?

Kuwait and Cryptocurrency

Kuwait Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

Kuwait’s Ministry of Finance does not recognize cryptocurrencies for purposes of official commercial transactions.  Similarly, the Central Bank of Kuwait (CBK) prohibits the banking sector and companies under its control from trading in cryptocurrencies.  The prohibition includes acceptance of cryptocurrency usage in e-payment transactions and mediation between the parties to cryptocurrency transactions.[523] The CBK has asked the Ministry of Commerce and Industry to warn consumers about the risks of cryptocurrencies such as bitcoin.[524]

In January 2018, the CBK confirmed the news that it was creating an infrastructure for the financial and banking sector in the country including the issuance of an e-currency, which it distinguished from virtual currencies.  The establishment of a local digital currency will fall under the umbrella of e-payments, the statement said.  The Central Bank highlighted that the local digital currency will have the same characteristics as paper money, such as an issuance number. It will also be monitored by the Kuwaiti government.  Furthermore, it could be exchanged with other currencies as well as used to pay for goods and services.[525]

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:

Podcast:

The Freeman Law Project – Cryptocurrency Regulation and Taxation: A Brief Primer

Do you have questions about cryptocurrency, digital currency, or blockchain technology?

Freeman Law can help with digital currencies, tax planning, and tax compliance.   Contact us now or Schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.


[523] Ministry of Finance Says Does Not Recognize Virtual Currency Bitcoin, Arab Times (Dec. 18, 2017), https://www.arabtimesonline.com/news/ministry-finance-says-not-recognise-virtual-currency-bitcoin/, archived at https://perma.cc/DBZ9-E66N.

[524] Darius McQuaid, Kuwait Refuses to Trade Cryptocurrency Amid Price Surge, Express (Dec. 20, 2017), https://www.express.co.uk/finance/city/894639/bitcoin-banned-Kuwait-KPMG, archived at https://perma.cc/KX9A-VM73.

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