Prominent Saudi economist Ihsan Buhulaiga has urged the Gulf Cooperation Council (GCC) countries to implement unified cryptocurrency regulations.
According to a report by AGBI, Buhulaiga, a former member of Saudi Arabia’s Shura Council, warned that without coordinated policies, cryptocurrency traders might relocate their investments to countries with more favourable regulations, such as the UAE or Bahrain.
While Saudi Arabia has banned cryptocurrencies, the UAE has implemented policies to regulate their use, raising concerns about the fragmented approach within the GCC. Buhulaiga emphasized the need for a shared roadmap, noting the increasing global adoption of cryptocurrencies as a payment method and financial reserve, particularly in light of US President Donald Trump’s policies supporting digital currencies.
The debate surrounding cryptocurrencies in Saudi Arabia has intensified, with many officials and experts expressing opposition due to religious, financial, and security concerns. The report highlighted warnings from Saudi opinion writer Abdul Rahman bin Nahi, who cautioned that cryptocurrencies’ instability and speculative nature could harm the economy and conflict with Islamic financial principles, emphasizing transparency and fairness.
Bin Nahi also highlighted the risk cryptocurrencies pose to global efforts in combating money laundering and terrorist financing, as they enable anonymous, unregulated transactions. Despite these concerns, the rising influence of digital currencies globally calls for urgent action from the GCC to develop a cohesive regulatory framework.
This report comes on the heels of the UAE’s continued efforts to establish itself as a global crypto hub. Notably, Dubai has recently been ranked as the top global crypto business hub for 2024, scoring 79 out of 100 in a Social Capital Markets (SCM) report. Key factors for this ranking include its clear legal framework, zero capital gains tax, and a competitive 9% corporate tax rate. The Virtual Asset Regulatory Authority (VARA) has significantly contributed to this appeal by providing transparency-focused guidelines and regulatory support for cryptocurrency and blockchain companies.
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