Bitcoin legality in the Arab world
The legality of Bitcoin in the Arab world, where there have been many questions recently about the legal duration of this rapidly rising cryptocurrency, so in today’s article we will talk about a quick definition of the Bitcoin currency and the extent of the legality of this currency (at the present time, of course).
Read also: The future of e-commerce
What is Bitcoin?
- is used Bitcoin is an electronic payment systemThe idea of Bitcoin was to create a currency that could be independent of all central systems with the ability to share data in a way that did not require any intermediary to authenticate and process transactions.
- Since this process occurs independently of banks, Bitcoin has the ability to transfer without any transaction fees.
- There is no single person controlling the Bitcoin network.
- It is also not printed in physical form such as dollars, euros or pounds sterling.
- Instead, it is issued or extracted by people and companies.
- This is done by highly sophisticated computers that use software to implement complex mathematical algorithms.
How is Bitcoin issued?
- Bitcoin is not issued by a central bank or financial institution, unlike fiat money.
- Instead, all bitcoins are mined digitally through an online community.
- Anyone can join the network and mine bitcoins on their own using massive computer power or simply buy bitcoins from an individual or broker at the current conversion rate.
- And unlike central banks around the world that print more money (which reduces the value of their currency), there are a limited number of Bitcoins.
- The Bitcoin protocol states that only 21 million Bitcoins can be mined.
- Each Bitcoin can also be divided into smaller parts, like the pound sterling when divided into pennies. The smallest fraction of a bitcoin will be divided into one hundred million bitcoins.
Why do traders prefer Bitcoin over fiat currencies?
- It is an anonymous currency that anyone can hold multiple Bitcoin addresses.
- Also, no personal information is required, such as real names, addresses, or payment details.
- There is no central exchange, each computer that mines bitcoins and processes transactions becomes part of the bitcoin network, with all devices working interconnected with each other.
- Unlike fiat currency, there is no central authority that can change the price or influence monetary policy such as the Bank of England, which can affect the value of the pound sterling through policy decisions or interest rates.
- This also means that in the event of a failure in the Bitcoin network, funds and Bitcoins will continue to flow between devices.
- Low cost and fast execution. Money can be sent anywhere in the world and delivered in real time.
- All you have to do is wait for the Bitcoin network to process the payment.
- In traditional currencies, you have to pay significant fees with your bank for international money transfer services, but this does not apply to Bitcoin.
- You may only have to pay transaction fees if you use a broker, and they are usually much less expensive than bank transaction fees.
See also: Ways to profit from the Internet
What is the legality of Bitcoin in the Arab world and the world?
- Of 246 countries, 99 (40% of the world) have no laws restricting Bitcoin.
- While about 17 countries (7% of the world) treat Bitcoin as an illegal currency.
- On the other hand, 130 countries (53% of the world) have not yet commented on Bitcoin or the legality of its use within these countries.
- This poses a risk for Bitcoin if these countries eventually decide to impose restrictions on cryptocurrencies.
Countries where Bitcoin is banned
- Only a few countries have banned Bitcoin completely.
- A prime example of this is Iceland, where the world's largest Bitcoin mining farms are located.
- But at the same time, residents cannot buy bitcoins.
- This is done to try to prevent the withdrawal of capital from Iceland.
- The remaining five countries are: Bolivia, Ecuador, Bangladesh, Kyrgyzstan, Vietnam, Algeria, Bangladesh, Bolivia, Cambodia, China, Colombia, Ecuador, Egypt, Indonesia, Iran, Morocco, Nepal, Pakistan, Saudi Arabia and Taiwan.
Countries where Bitcoin is legal
Argentina, Australia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Chile, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel , Italy, Jamaica, Japan, Kyrgyzstan, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Namibia, Netherlands, New Zealand, Nicaragua, Nigeria, Norway, Philippines, Poland, Portugal, Romania, Russia, Singapore, Slovakia, Slovenia and South Africa, South Korea, Spain, Sweden, Switzerland, Trinidad and Tobago, Turkey, Ukraine, United Kingdom, USA, Uzbekistan, Venezuela and Zimbabwe.
See also: Trading via Fixed time
Countries where Bitcoin is limited (restricted)
- These are countries that have a legal basis for Bitcoin but do not consider it a real currency, as Japan does.
- Most countries in the world fall into this category regarding dealing with Bitcoin.
- For example, in the United States, the Commodity Futures Trading Commission classifies Bitcoin as a commodity.
- While the US Treasury views it as a money handling company.
- Other countries that limit (restrict) the use of Bitcoin are Canada, India, Jordan, Thailand, United Arab Emirates, and Vietnam.
Bitcoin legality in the Arab world
We note that most Arab countries ban Bitcoin or warn against it and place restrictions on it for various reasons. The following table shows each country and the legal status of Bitcoin in it so far.
| Country | Trading is allowed | Mining is allowed |
| Egypt | Forbidden | Forbidden |
| Algeria | Forbidden | Forbidden |
| Sudan | unknown | unknown |
| Iraq | unknown | unknown |
| Morocco | Forbidden | Not banned/unknown |
| Saudi Arabia | Allowed with warning | unknown |
| Yemen | unknown | unknown |
| Syria | unknown | unknown |
| Tunisia | unknown | unknown |
| Jordan | Forbidden | unknown |
| The UAE | Forbidden | Forbidden |
| Lebanon | Permissible | Not prohibited |
| Libya | unknown | unknown |
| Palestine | unknown | unknown |
| Oman | unknown | unknown |
| Mauritania | unknown | unknown |
| Kuwait | unknown | unknown |
| Qatar | Allowed with warning | Not banned/unknown |
| the two seas | unknown | unknown |
| Djibouti | unknown | unknown |
| Comoros | unknown | unknown |
Some details about the legality of Bitcoin in the Arab world:
Egypt: Mining and trading prohibited
The Egyptian Fatwa House issued a religious decree classifying commercial transactions in Bitcoin as haram (prohibited under Islamic law) and official authorities prohibit its mining and prosecute miners.
reference: https://www.dar-alifta.org/ar/ViewFatwa.aspx?sec=fatwa&ID=14139
Algeria: Mining and trading prohibited
The purchase, sale, use and possession of so-called virtual currency is prohibited. Virtual currency is one that is used by Internet users across the web. It is characterized by the absence of physical support such as coins, banknotes, or payments by check or credit card. Any breach of this provision shall be punished in accordance with applicable laws and regulations.
reference: https://www.joradp.dz/FTP/jo-francais/2017/F2017076.pdf
Morocco: Modification and circulation prohibited
On November 20, 2017, the Bureau of Exchange issued a public statement declaring, 'The Bureau of Exchange wishes to inform the public that transactions via virtual currencies constitute a violation of exchange regulations, and are subject to the penalties and fines stipulated in [existing] applicable laws.
The next day, monetary authorities also responded in a statement issued jointly by the Ministry of Economy and Finance, the Bank of Morocco and the Moroccan Capital Market Authority (AMMC), warning of the risks associated with bitcoin, which could be used for illicit purposes. or for criminal purposes, including money laundering and terrorist financing
References:
A sudden official decision... Bitcoin is banned in Morocco, and trading in it exposes you to arrest
Morocco criminalizes dealing in “Bitcoin” for fear of its economy and currency
Why does the Central Bank of Morocco warn against investing in Bitcoin?
UAE: Mining and trading prohibited
Absolute ban. According to Article D.7.3 of the Regulatory Framework for Stored Values and Electronic Payment System, issued by the Central Bank of the UAE in January 2017, all transactions in 'virtual currencies' (including cryptocurrencies) are prohibited. The DMCC website emphasizes 'cold storage' of cryptocurrencies and states that the DMCC's crypto-commodities license is for monopolistic trading in crypto-commodities only. No initial coin offerings and no exchange establishment are permitted under this license.
In November 2020, the Securities and Commodities Authority published 'Decision of the Chairman of the Authority's Board of Directors No. (23/Chairman)' of 2020 regarding the regulation of crypto-asset activities. Establishes a regulatory framework for the offering, issuance, listing and trading of crypto assets. Crypto asset providers must be incorporated within the UAE.
References:
UAE announces new regulations for licensing crypto assets
Saudi Arabia: Trading is not prohibited, it is not clear regarding mining, but it is prohibited by the Central Bank
Financial institutions are being warned against using Bitcoin
The Saudi Central Bank warned against using Bitcoin because it is high risk and no protection or rights will be guaranteed for its customers.
reference: Virtual digital currencies are not approved within the Kingdom, and dealing in them is risky
Jordan: Trading is not prohibited, it is not clear about mining, but it is prohibited by the Central Bank
The Jordanian government issued a warning not to encourage the use of Bitcoin and other similar systems.
The Central Bank of Jordan prohibits banks, exchange companies, financial companies, and payment service companies from dealing in Bitcoin or other digital currencies.
While she has warned the public about the dangers of bitcoins, and that they are not legal, bitcoins are still accepted by small businesses and merchants.
Lebanon: Mining is not prohibited/unknown, and trading is permitted, but the Central Bank warns against Bitcoin.
Lebanon The Central Bank of Lebanon warned, in a circular addressed to banks, financial institutions, exchange, financial brokerage, and the public in 2014, against purchasing, possessing, or using electronic money. The justification for the circular stated: “With reference to Basic Resolution No. 7548 dated 3/30/2000 relating to financial and banking operations by electronic means, especially Article 3 thereof, which prohibits the issuance of electronic money from anyone and dealing with it in any way.”
References:
The fictitious currency “Bitcoin” was banned by the Central Bank due to its lack of protection
Including Lebanon.. What countries prohibit trading in Bitcoin?
Despite warnings, Bitcoin gains toehold in the region
Qatar: Mining is not prohibited/unknown, and trading is permitted, but the Central Bank warns against Bitcoin.
The Qatar Central Bank has warned financial institutions against trading Bitcoin or any other cryptocurrenciesHe said in a press statement published on the bank’s website that there are risks surrounding dealing in the currency Bitcoin Virtualization “because there is no commitment from any Central bank Or a government around the world guarantees the value of this currency, and there is no equivalent for it, whether in gold, other metals, or commodities.”
References:
The Qatari Central Bank warns against trading Bitcoin
Qatar Bans All Cryptocurrency in QFC
Conclusion:
In the end, it varies Legal status of Bitcoin It varies greatly from country to country and remains undefined or variable in many of them, while the majority of countries do not consider the use of Bitcoin itself illegal and its status as money (or commodity) varies.
Although this article explains the legal status of Bitcoin, the legalization and bans that apply to this cryptocurrency often also apply to other similar systems.
