Kuwait is one of the few countries that opposes the use of bitcoin for commerce. This is because bitcoin is too expensive, volatile, and risky for the country.

The reason for Kuwait’s cryptocurrency restriction is as follows:

  1. Economic instability: The Kuwaiti government has stated that it is not able to support bitcoin due to its economic instability. This is in line with other countries that have voiced similar concerns, such as Bahrain and Qatar. Bitcoin’s price volatility has also been a major issue for its acceptance by the general public.
  2. Criminal activity: There are concerns about criminal activity being conducted with bitcoin, specifically money laundering and terrorist financing. These activities are often done in dark markets and can be difficult to track down. Additionally, bitcoin is not regulated like traditional currency systems, which could make it more susceptible to theft or fraud.

1. The Shariah

In Kuwait, Islam is the predominant religion. Many people have debated whether bitcoin is halal or haram, however, anything that involves elements of unfaithfulness, gambling, or usury is haram according to Islamic law.

This discussion, however, differs from country to country. Some Islamic countries do not consider Bitcoin to be haram and allow it to be traded. Supporters and opponents are two categories of people. Crypto is a money innovation, according to proponents, because it brings wealth to people who participate. Skeptics argue that it is haram in Islam since it is a usury company. Usury is prohibited in several Quranic verses.

Digitalization has brought great innovation to the world, whether in the medical sector, banking industry, or now in currency. It has brought smooth processes and the best for e-commerce platforms. ..

2. CKB Banking

Cryptocurrency offers strong privacy to people for the transaction and it should be very difficult to monitor and control. This is the main reason the central bank of Kuwait does not accepting bitcoin for trading. People hide their identity from crime through this transaction and the dark web is one of them. Central Bank of Kuwait start an awareness program which is named as Diraya campaign.

The campaign’s goals are to raise awareness, identify potential problems, and educate people about the dangers of not following safety and security rules when using modern technology. Regulations prohibit disclosing account and personal transaction information to unknown parties or responding to messages from unknown sources since this would be a violation of data privacy and banking protection laws.

3. Terrorism Funding

Kuwaiti authorities believe that digital money has a high level of anonymity and that no one buys and sells cryptocurrencies at high rates. This could pose a threat to the public, as funds could be used to sponsor terrorism.

The government has determined that trading indirectly with cryptocurrencies is not allowed, as this could be contingent on a person’s viability. However, banks and other organizations impose limitations on this type of trading. For example, terrorist organizations may use digital currency to purchase goods and services. This is a problem because it means that terrorists are able to benefit from cryptocurrency in ways that are not transparent.

4. Buying Forbidden Products

Many reports suggest that they utilized excessive money due to the huge currency volatility, according to the latest news. The use of cryptocurrencies, such as Bitcoin, to buy and sell forbidden products and services on the dark web is a significant component of cyberterrorism. Experts predict that the dark web will attract terrorists because of its global reach, speed, and degree of anonymity. Terrorists are likely to employ cryptocurrency on the dark web since it is a highly effective and clandestine platform.

5. Money Laundering

Cryptocurrency is a digital or virtual asset that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Many people who get money through illicit means such as gambling, crime, and other criminal activities invest in cryptocurrency because it does not have a centralized structure like banks. This decentralization makes it difficult for governments or financial institutions to track or regulate the currency. Cryptocurrencies are also anonymous, which makes them attractive to people who want to avoid being tracked or identified. ..

6. Its own digital money is being developed

Kuwait could have used this technology to grow its digital market. However, the government only has a strong thorough tax system in place for domestic business, and no such structure exists for digital money. This lack of clarity is hindering the development of this industry.

Kuwaiti citizens are not allowed to buy or sell cryptoassets through the banking or financial system. If Kuwaiti organizations impose severe limits on how these exchange systems operate, there will be a plethora of crypto exchange platforms.

The government must take some form of action in order to regulate or ban cryptocurrency exchanges. There are three possible solutions: the government can legalize crypto as is done in Israel, create its own digital currency, or do a combination of the two. ..