The following is the second installment of a two-part guest post on the regulation of cryptocurrencies in the Gulf Cooperation (CCC) countries by Muneera Al-Khalifa, legal research fellow, working with Foreign Law Specialist George Sadek at the Global Legal Research Directorate of the Law Library of Congress. Read part one on the regulation of cryptocurrencies in the United Arab Emirates, Kingdom of Saudi Arabia, and Kingdom of Bahrain here. This post is part of our Frequently Asked Legal Questions (FALQs) series.
1. How are cryptocurrencies regulated in Qatar?
Qatar has previously maintained a cautious approach toward cryptocurrencies. In February of 2018, the Qatar Central Bank (QCB) issued Circular No. (6) of 2018, explicitly prohibiting all financial institutions in Qatar from trading in cryptocurrencies. This Circular cited concerns over the risks associated with these assets, including their potential use in financial crimes or cybercrimes. It also stated that violators are subject to penalties under Law No. (13) of 2012, which promulgates the QCB law and the Regulation of Financial Institutions. These penalties and sanctions include issuing warnings to mandate corrective actions, imposing fines not exceeding QAR 10 million (about US$2.75 million) per violation, suspending or revoking licenses, restricting or halting operations until compliance is ensured, dismissing or replacing directors or management, appointing an interim board of directors and chief executive at the financial institution’s expense, and enforcing restitution orders. (Arts. 90, 127, 201-218 of law No. (13) of 2012.) Additionally, in December of 2019, the Qatar Financial Centre Regulatory Authority (QFCRA) issued an alert prohibiting the conduct of virtual asset services within or from the Qatar Financial Centre (QFC). Penalties for violators are imposed according to QFC Law No. (7) of 2005. However, recent developments indicate a shift toward a more structured regulatory approach for virtual assets, while continuing to exclude cryptocurrencies from the regulations.
In September of 2024, the QFC Authority and QFCRA jointly introduced the Digital Assets Regulations 2024 and Investment Token Rules 2024 to establish a comprehensive framework for digital assets, marking a significant shift in Qatar’s approach to this sector. The Digital Assets Regulations apply to tokens that meet the specified criteria outlined in the regulations, transactions involving a permitted token as defined in article (9), and the provision of token services.
The Digital Assets Regulations provide a legal framework for the ownership, transfer, and exchange of digital assets, including a licensing framework for token service providers, and legal recognition for smart contracts. However, article (9)(2) of the Digital Assets Regulations states that certain tokens, including cryptocurrencies, are excluded under the regulations. Similarly, the Investment Token Rules 2024 regulate activities involving investment tokens as outlined in Rule 2.1.1, but explicitly exclude cryptocurrencies as per Rule 2.1.2. While Qatar maintains a cautious approach toward cryptocurrencies, the QFC has made significant regulatory advancements in digital asset activities.
Law No. (20) of 2019 on Combating Money Laundering and Terrorism Financing (AML/CFT), as amended, does not explicitly mention crypto assets. However, it defines “funds” broadly to include any assets – tangible or intangible, movable or immovable – acquired through any means, including those obtained via “electronic and digital” systems. While cryptocurrencies are excluded from the new Digital Assets Framework, they remain subject to the general legal and regulatory frameworks, particularly the AML/CFT laws.
2. How are cryptocurrencies regulated in Kuwait?
As of December 2024, Kuwait enforces a comprehensive ban on activities related to cryptocurrencies, including payments, investments, and mining, demonstrating its commitment to financial security and stringent regulatory oversight. On July 17, 2023, the following regulatory authorities in Kuwait issued an “absolute prohibition” on dealing in virtual currencies, including:
- Circular issued by the Central Bank of Kuwait to all local banks, financing companies, and exchange companies.
- Circular No. (10) of 2023 issued by the Capital Markets Authority.
- Circular No. (6) of 2023 issued by Kuwait’s Insurance Regulatory Unit.
- Ministerial Circular No. (1) of 2023 issued by the Minister of Commerce and Industry and the Minister of State for Youth Affairs.
The circulars were issued to strengthen compliance with AML/CFT efforts and to reaffirm Kuwait’s commitment to implementing Recommendation (15) of the Financial Action Task Force’s international standards. Key prohibitions outlined in the circular include
- Payment: Strictly prohibits using virtual assets as a payment method or recognizing them as a decentralized currency in the State of Kuwait.
- Investment: Prohibits dealing with virtual assets as a means of investment and bans offering related services to any customer.
- Licensing: Prohibits the issuance of licenses to individuals or entities for providing virtual asset services, while clarifying that no licenses have previously been issued for such activities.
- Mining: Completely bans all virtual asset and crypto-currency mining activities.
Securities regulated by the Central Bank of Kuwait and all other securities and financial instruments regulated by the Capital Markets Authority are excluded from these prohibitions. The penalties stipulated in Article (15) of the AML/CFT Law No. (106) of 2013, as amended, shall be imposed on anyone who violates this Circular, without prejudice to the penalties stipulated by each supervisory authority. These penalties and sanctions include: the issuance of warnings, the issuance of compliance orders, mandating reports on corrective measures, the imposition of fines on the financial institution of up to KWD 500,000 (approx. USD 1.62 million) per violation, temporarily banning individuals from employment within the relevant sectors for a period determined by the supervisory authority, suspending, restricting, or prohibiting the continuation of activities or business operations, restricting the powers of directors, board members, executive or supervisory management members, and controlling owners, including appointing a temporary controller, dismissing or replacing directors or management members, the revocation or withdrawal of licenses. (Art. 15.)
Additionally, on May 22, 2021, the Central Bank of Kuwait issued a press statement highlighting the significant risks associated with dealing in cryptocurrencies, as unregulated digital assets. This initiative was part of the Diraya (translates to “be aware” in Arabic) campaign, supervised by the Central Bank of Kuwait and managed by the Kuwait Banking Association, with the participation of all Kuwaiti banks.
Law No. (106) of 2013 on AML/CFT, as amended, does not explicitly mention crypto assets. However, like the law in Qatar, it defines “funds” broadly to include any assets, whether movable or immovable and acquired through any means, including those in “electronic and digital form.” While Kuwait’s regulatory framework strictly prohibits the use of cryptocurrencies in financial transactions, investments, and mining, such assets remain subject to the genaral legal and regulatory frameworks, particularly the AML/CFT Laws.
3. How are cryptocurrencies regulated in Oman?
The Sultanate of Oman is progressively shaping its regulatory framework for virtual assets and cryptocurrencies, reflecting a cautious yet adaptive approach to the evolving digital finance landscape.
On February 14, 2023, the Capital Market Authority (CMA) announced its plans to establish a new regulatory framework for virtual assets and virtual asset service providers (VASPs). The proposed regulatory framework is designed to cover a wide range of activities, including crypto assets, tokens, cryptocurrency exchanges, initial coin offerings, and other related activities.
On June 6, 2023, the CMA issued Decision No. (E/35/2023), establishing the Instructions on Registration of VASPs and the Implementation of the Requirements for Combating Money Laundering and Terrorism Financing. Key provisions of Decision No. (E/35/2023) include
- Registration of VASPs: All entities offering VASPs within Oman must register with the CMA. This requirement applies to legal persons incorporated in Oman, natural persons with a place of business in Oman, and VASPs, whether they are legal or natural persons, that offer or conduct VASPs services in Oman.
- Anti-Money Laundering and Counter-Terrorism Financing Compliance (AML/CFT): VASPs must implement robust AML/CFT measures. These include thorough risk assessments of customers, transaction monitoring, and evaluating risks related to the nature, diversity, and complexity of the registered entity’s products, services, and transactions. VASPs must also establish internal policies and procedures to detect and report operational risks and suspicious transactions.
- Governance and Risk Management: The instructions state that existing VASPs are obligated to establish effective governance structures and risk management frameworks to align with the new regulations within three months from the Decision’s issuance.
- Reporting Obligations: VASPs must regularly report to the CMA on their operations, financial status, and compliance with AML/CFT requirements, facilitating ongoing regulatory oversight.
- Penalties for Non-Compliance: Any person that violates these Instructions shall be punished by one or more of the measures and penalties stipulated in article (52) of Royal Decree No. (30) of 2016 promulgating the Law on Combating Money Laundering and Terrorism Financing. These penalties and sanctions include: issuing a written warning, mandating compliance with specific instructions, requiring regular reports on corrective measures, the imposition of an administrative fine ranging from OMR 10,000 (about US$26,000) to OMR 100,000 (about US$260,000) per violation, replacing or restricting the roles of compliance officers, directors, board members, or controlling owner, including appointing a special administrative supervisor, suspending individuals from employment within the relevant sectors, either temporarily or permanently, imposing guardianship over the entity, and suspending, canceling, or placing restrictions on the license to practice operations or activities. (Art. 52.)
On July 27, 2023, the CMA initiated a three-week public consultation on the proposed Virtual Assets Regulatory Framework. The framework seeks to establish a comprehensive system for licensing all categories of VASPs and streamlining the process for obtaining operational licenses, including expected timeframes and associated fees. It also outlines a robust supervisory framework designed to identify, assess, and mitigate ongoing risks. As of December 2024, the framework remains under review and has not been formally finalized.
Royal Decree No. (30) of 2016 on AML/CFT, as amended, does not explicitly mention crypto assets. However, as in Qatar and Kuwait, it defines “funds” broadly to include any assets—whether movable or immovable, tangible or intangible—acquired through any means, including those in “electronic or digital” form. While Oman does not have specific legislation governing the use or trading of cryptocurrencies, their use is subject to the general legal and regulatory frameworks, particularly AML/CFT laws.
4. Where can I find additional resources?
The Law Library has written a report, and updated it, on the regulation of cryptocurrencies around the world.
- Regulation of Cryptocurrency Around the World, Law Library of Congress (2018)
- Regulation of Cryptocurrency Around the World Update, Law Library of Congress (2021)
For additional legal developments in the above-mentioned jurisdictions, visit the Law Library resource, the Global Legal Monitor, which also include subject specific legal topics.
- Global Legal Monitor: Kuwait
- Global Legal Monitor: Oman
- Global Legal Monitor: Qatar
- Global Legal Monitor: Cryptocurrency
If you have a question regarding Kuwaiti, Omani, or Qatari laws, you can also submit it using the Ask a Librarian form on our website.
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