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Saudi Central Bank Refuses to Develop Cryptocurrency Regulation Framework

Oct 26, 2017 Posted /  4205 Views

Saudi Central Bank Refuses to Develop Cryptocurrency Regulation Framework

The Saudi central bank is turning it’s back on putting up cryptocurrency regulations citing that the industry is still immature. The Central bank’s senior advisor Mr. Abdulmalik Al-Sheikh said during a CNBC interview that, they will wait till the right time to regulate cryptocurrency. Currently, no restrictions of any form are put on Initial Coin Offerings (ICO). Mr. Adulmalik promises that they will be observing the cryptocurrency industry and ICOs before drafting a regulatory framework that will govern it.

We are still Observing activities in the Cryptocurrency Industry

On Monday during an interview on CNBC Mr. Abdulmalik Al-Sheik a senior advisor at the Saudi Arabian Monetary Agency (SAMA) said cryptocurrency is not yet on the regulatory agenda of the Body. Mr. Abdulmalik believes that it’s vital to give enough time to cryptocurrency to develop before the Bank could jump to putting regulations on its activities. He highlighted that the cryptocurrency industry is still comprised of startup companies trying to establish themselves in the industry. On ICO Mr. Abdulmalik says ICOs will be allowed but under the watch of the central bank though without any regulatory restrictions imposed on it. He stated that the industry needs up to at least five years for its impacts on the national currency to be ascertained. This follows a similar comment made by the chief of the European Central Bank Mr. Mario Draghi. He stated during a press conference that Bitcoin and Cryptocurrency Industry is not yet matured enough for the Bank’s consideration.

Cryptocurrency Industry still Young in Saudi Arabia

Many countries have already put in place regulations to govern the activities of Bitcoin and other related cryptocurrencies. Some countries like China has adopted tough policies that would see the abolition of cryptocurrency in its territories altogether. The level of cryptocurrency activities in a country is indicated by the presence of Exchanges across the country. Bitcoin or cryptocurrency exchange is very cryptocurrency is traded for the local currency of the country. Saudi Arabia has few such exchange operating in the country indicating that the level of activity of cryptocurrency is still low in the country. According to this map, only one Bitcoin ATM is available in the entire country unlike it’s the case in Canada with Numerous of such machines.

The Need for a Regulation

Although there is still low activities on Bitcoin and cryptocurrency in Saudi Arabia it’s Vital to have regulatory plans underway as suggested by Mr. Abdulmalik. The Cryptocurrency Industry develops usually in a very short span of time. Mostly the success of one ICO tends to lure very many projects to conduct ICOs too. Cryptocurrency ideas are in most cases related to technology and IT and Blockchain. It's rather less time consuming for companies to develop websites and the software they require to convince the public during their ICO. this signifies how urgently a regulation might be needed to govern a cryptocurrency Industry.

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Tags: bitcoin Regulations saudi arabia

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