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|24 October, 2017

UAE Central Bank warns against the use of cryptocurrencies

Cryptocurrencies, especially Bitcoin, is a buzzword today as their prices recorded an exponential rise this year.

A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. Image used for illustrative purpose.

A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. Image used for illustrative purpose.

REUTERS/Benoit Tessier/Illustration
The UAE Central Bank warned on Monday against the use of "digital coins", saying it has not issued a licence to allow the currency in the local market.

Cautioning corporates and the public alike, Governor Mubarak Rashed Al Mansouri said there are high risks in dealing with such kind of currencies. He said there is no entity that controls or monitors that business. Nor is it identifiable who is behind a cryptocurrency.

Al Mansouri was speaking on the sidelines of the 13th Islamic Financial Services Board (IFSB) Summit in Abu Dhabi. Dr Abdulrahman Abdullah Al Humaidi, director-general and chairman of the board of directors of the Arab Monetary Fund, supervisory and regulatory authorities, institutions providing Islamic financial services, international organisations and multinational development banks also attended the summit.

Cryptocurrencies, especially Bitcoin, is a buzzword today as their prices recorded an exponential rise this year. Bitcoin, one of the cryptocurrencies, reached a high of $6,148 on Saturday and last traded at approximately $5,899.8 on Monday. It has surged more than six times this year so far and outperformed all other asset classes.

Last month, the Dubai Financial Services Authority (DFSA) drew investors' attention to certain online offerings and said it does not currently regulate cryptocurrencies. It urged investors to be wary of "unique risks" inherent in "initial coin offering". "These offerings should be regarded as high-risk investments," said the financial regulator of the purpose-built international financial free zone in Dubai.

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Notably, the DFSA added it had not regulated nor licensed any entities in the financial zone.

reporters@khaleejtimes.com




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