Kuwait Imposes ‘Absolute Prohibition’ on Crypto Payments

Kuwait has outlawed the use of cryptocurrency in payments or investments to prevent money laundering.

Regulations unveiled earlier this week by the country’s Capital Markets Authority (CMA) place an “absolute prohibition” on the use of digital currencies in making payments, and come amid a worldwide wave of regulations designed to place curbs on the crypto sector.

The regulator says it has also banned digital asset mining, refuses to recognize crypto as a decentralized currency and reminds consumers that businesses are barred from providing any services related to cryptocurrency.

“Securities regulated by the Central Bank of Kuwait and other securities and financial instruments regulated by the Capital Markets Authority are excluded from this prohibition,” the circular said.

According to the CMA, the ban is designed to comply with recommendations from the Financial Action Task Force on crypto assets, and follow “the conclusions of the study prepared by the National Committee for Combating Money Laundering and Terrorist Financing.”

The CMA’s new rules arrived the same week that the Financial Stability Board (FSB) unveiled  a proposed framework for the crypto sector, designed to offer “a strong basis for ensuring that crypto-asset activities and so-called stablecoins are subject to consistent and comprehensive regulation, commensurate to the risks they pose.”

As PYMNTS wrote, the global watchdog wants to make crypto platforms segregate customer funds from their own, and clearly delineate functions to prevent conflict of interest, with regulators ensuring strong cross-border cooperation and oversight.

Meanwhile, crypto regulation in America remains an open question. It is, PYMNTS wrote last week, both “the elephant in crypto’s living room” and “the wildebeest trampling across the domestic crypto industry’s landscape.”

The U.S. Securities and Exchange Commission’s (SEC) enforcement actions against two of the world’s largest crypto exchanges, Binance and Coinbase, have sent a chill through the sector, though the industry did claim a recent victory when a court ruling decided against the SEC in a case involving another crypto company, Ripple.

At the same time, lawmakers are working on ways to regulate the industry, among them Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.), who last week reintroduced a bipartisan bill designed to serve as a comprehensive legal framework for both policing and supporting the digital asset industry.

“The crypto asset industry is here to stay,” Lummis tweeted.

“We need a regulatory framework that integrates crypto assets into our economy in a way that ensures consumer protection,” the lawmaker added. “This legislation is needed to protect consumers but also so there are rules for the road for companies.”