Qatar’s central bank has warned financial institutions in the country not to trade in bitcoin or other cryptocurrencies, according to financial sources and a circular seen by Reuters, which is still not uploaded to the c-bank’s website.
In the letter, the c-bank “politely requested banks and exchange houses in the country not to deal in any way with this currency, or exchange it with another currency, or open accounts to deal with it, or send or receive any money transfers for the purpose of buying or selling this currency”. The missive pointed out that Bitcoin and the likes are illegal, because none of the central banks or governments in the world have formally recognized it as an acceptable form of payment or store of value akin to fiat currency or gold.
Further, the letter added that failure to comply with this request could result with penalties under existing legislation.
According to Reuters, the banks in the oil and natural gas-rich Gulf state, were already avoiding dealing with bitcoin and other cryptocurrencies, but some of its residents were dabbling in trading on the online exchanges and were looking for ways to invest in cryptocurrencies.
So far Quatar is the only Gulf state that has come out with an explicit ban on cryptocurrency trading. Saudi Arabia has urged its citizens to avoid it, while the UAE and Oman regulators have issued warnings of the risks of trading in cryptocurrencies and participating in ICOs.