GCC needs common policy on crypto, says Saudi academic

GCC needs common policy on crypto, says Saudi academic

Saudi Arabia and other Gulf Arab states should develop aligned policies and regulations around the potential use of cryptocurrencies as a payment tool, a prominent Saudi academic and economist has said.

While the largest Arab economy generally forbids the use of cryptocurrencies, the UAE has put some policies in place to regulate their use.

“Saudi Arabia and other countries (in the region) need to think about the rapid developments in this type of currency. They need a roadmap in this respect,” Ihsan Buhulaiga, a former member of the Saudi shura council and author of several books on the Saudi economy, told AGBI. The shura council is the kingdom’s appointed parliament.

“The GCC countries should sit together and discuss this issue because it has become very important given the fact that some countries are adopting this currency as a payment tool and others are taking it as part of their financial reserves,” Buhulaiga said.

The GCC comprises Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain and Oman.

“Experiences have shown that what one GCC country does not allow can be done in another member. In other words, if I cannot invest in cryptocurrencies in Saudi Arabia, I will take my money and go to the UAE or Bahrain,” Buhulaiga wrote in the local Al Mal newspaper last week.

“This situation requires an urgent solution because such currencies are gaining ground worldwide and will continue to rise due to US President Donald Trump’s policy of supporting digital currencies and making them part of the Fed reserves,” Buhulaiga said.

Debate in Saudi Arabia around cryptocurrencies has accelerated, especially since Trump’s election win in November.

Writing in the same newspaper on Sunday, Abdul Rahman bin Nahi, a frequent opinion writer in the Saudi media, said the kingdom’s government is generally opposed to the use of cryptocurrencies based on religious, finance and security reasons.

“Islam is based on transparency and fairness in financial dealings and the need to avert big risks,” bin Nahi wrote. “Given their unstable nature and widespread speculations, cryptocurrencies could cause economic and social damage.”

Such risks contradict Islamic values, which seek to protect the public and limit financial damage, he said.

“Moreover, the kingdom is making great efforts to combat money laundering and terrorist financing as part of its international commitment.

“Cryptocurrencies, which allow for invisible and unsupervised transactions, pose a major risk to financial security.”

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