UAE Central Bank Governor Warns Against Bitcoin

Announcements, News, Regulation | October 25, 2017 By:

The Central Bank of the United Arab Emirates (UAE) has warned the public against using cryptocurrencies such as bitcoin, calling it unofficial and lacking sufficient supervision.

Speaking at the Islamic Financial Services Board Summit, UAE Central Bank Governor Mubarak Rashed Al Mansouri said there are high risks in dealing with digital currencies. He said there is no entity that control or monitor any cryptocurrency businesses operating in the UAE.

Al Mansouri also noted the sharp fall in bitcoin price driven by the decision of some countries not to use the digital currency.

“Some nations have announced that they are not using bitcoin, and consequently its value sharply plummeted,” said Al Mansouri. “In addition, it can be easily used in money laundering and in funding terror activities.”

Back in January, the central bank published a document, the “Regulatory Framework for Stored Values and Electronic Payment System,” containing its “vision of leading market adoption” of digital payments and FinTech technologies within the country. One section of the document explicitly prohibits the use of digital currencies, which, of course, resulted in controversial discussions and companies asking the central bank if the bill considers bitcoin and other digital currencies currently in existence.

Al Mansouri confirmed that the document doesn’t consider digital currencies. But he stressed that digital currencies were under review and that the central bank was “developing necessary regulatory frameworks for businesses and exchanges to comply with.”