Saudi Central Bank Says Cryptocurrency Industry is "Not Mature Enough" to Warrant Regulation

In an interview with CNBC on Monday, Abdulmalik Al-Sheikh, senior adviser at Saudi Arabia’s central bank, stated that the regulator does not believe the cryptocurrency has matured enough to warrant regulation at this point in time. Mr. Al-Sheikh also stated that the central bank will wait and observe before delivering a determination regarding its regulatory position on initial coin offerings (ICOs).

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Saudi Arabia’s Central Bank Is “Observing” Bitcoin and Cryptocurrency

In a recent interview with CNBC, Abdulmlik Al-Sheikh, a high-ranking representative of the Saudi Arabia Monetary Authority, stated his belief that “cryptocurrency is still [in] its infancy.” Mr. Al-Sheikh described the cryptocurrency industry as merely comprising “pilots, trials, here and there.” With regards to regulations, Mr. Alsheikh stated that he does not believe the industry is “strong” enough to warrant the central bank “jump[ing] in.”

Mr. Al-Sheikh stated that many central banks are monitoring cryptocurrencies, however, and emphasized the need for the industry to be given more time to mature before developing comprehensive regulation. “I think all the central banks… are observing [and] trying to measure the impact of [cryptocurrencies]. I think it’s about another five years before we can really see whether there is a true impact on the currencies in general [and] what will be the future operating model of… cryptocurrency.”

Mr. Al-Sheikh’s comments echo those made last week by European Central Bank Chief Mario Draghi. At a press conference, Mr. Draghi stated: “as far as bitcoins and cryptocurrencies are concerned – we don’t think the technology is mature for our consideration.”

“It’s Still [Too] Premature to Come up With a Definite Answer [as] to the Impact [of Cryptocurrencies]” – Abdulmalik Al-Sheikh, Senior Adviser at SAMA

Mr. Al-Sheikh similarly addressed SAMA’s position pertaining the issuance of state-backed cryptocurrency, stating that the central bank is “observing the development globally… looking at different possibilities and scenarios.”

Regarding initial coin offerings, Mr. Al-Sheikh stated that SAMA is observing and monitoring what’s happening, and “try[ing] to measure the risks associated.” Mr. Al-Sheik described ICOs as “not something that is traded and accepted globally.”

On the same day, CNBC reported that Saudi Arabian Prince Alwaleed bin Talal expressed his belief that bitcoin is destined to “implode” in the future. Prince Alwaleed told CNBC that bitcoin “just doesn’t make sense. This thing is not regulated, it’s not under control [and] it’s not under the supervision [of a central bank]”. Prince Alwaleed also described bitcoin as “Enron in the making.”

Do you think that Mr. Al-Sheikh’s comments regarding bitcoin’s maturity and regulation are accurate? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, sama.gov.sa

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