No, Saudi Arabia has not (yet) banned trading cryptocurrencies

Many blogs in the crypto space are currently spreading the rumor that the Saudi Arabian government has banned trading cryptocurrencies. That is, however, not true and an exaggeration by different news sites, blogs etc. copying each other without further research. A clarification.

No ban, but a grey area

A statement of several government officials that is unfortunately not available in English caused the rumor. The officials represented the ministry of commerce, finances and of the interior. However, it only stated that exchanges and other crypto services are not approved by the government and that they do not possess licenses for their financial activities in Saudi Arabia. Therefore, trading cryptocurrencies is only illegal in the sense that persons dealing with cryptocurrencies are moving in a grey area. The statement further warned of cryptocurrencies. According to the Saudi Arabian officials, they are involved with illegal activities, scams and money laundering. But there is no official legislation regarding trading and dealing with cryptocurrencies as of now.

Negative stance of Saudi state on cryptocurrencies are known

Mecca – religious objections are holding up the adoption of crypto in the Wahabi state

The negative stance of many government officials is known since last year. As even the royal family of Saudi Arabia shares this view. Prince Al-Waleed bin Talal made headlines on relevant crypto websites last year by comparing Bitcoin to Enron. An energy company during the dot-com bubble that rallied higher and higher on the stock markets, until it finally crashed and went bankrupt. So,  while the legal status of cryptocurrencies is currently undefined, it is very well likely that the Saudi government will back its statement with according legislation.

A ban is in the interest of the Saudi Arabian state

Considering the situation of the Turkish Lira, it is possible that the Saudi government worries about its own financial stability. Especially since significant revenues by the oil industry continue to be uncertain. Crisis and financial instability are drivers of Bitcoin’s popularity. Bitcoin rallied in its early years in the wake of the Euro crisis and some minor bank runs in Spain, Greece and in Cyprus. So it is very well likely that Saudi Arabia will be the next state that bans the trade of cryptocurrencies. It is significant, however, that Turkey has not yet taken this step.