Crypto Regulations in Jordan
In Jordan, the Government’s unfavorable attitude towards cryptocurrency has fostered a hostile legal environment for the new technology. The Central Bank of Jordan (CBJ) enacted legislation that prohibits all banks, currency exchange companies, financial entities, and payment service providers from facilitating any cryptocurrency transactions, including Bitcoin. Consequently, cryptocurrency trading is virtually prohibited under the laws of Jordan.
In addition to the prohibition, the CBJ issued an official warning about the risks of cryptocurrency trading. First, the CBJ emphasized that cryptocurrencies do not qualify as legal tender in Jordan. Second, the CBJ noted that “there is no obligation on any central bank in the world or any government to exchange its value for real money issued by them nor [is cryptocurrency] backed by underlying international commodities or gold.” Essentially, the CBJ is arguing that there are no real assets underlying the value of cryptocurrency.
Source: Freeman Law
The Jordanian government has taken a harsh stance on Bitcoin and other cryptocurrencies, at one point banning them entirely. However, the Bitcoin ban in Jordan was defeated in an appeal.
In July 2021, Talal Tabbaa, co-founder of Jibrel Network, an open-source, web development company, was quoted in a Jordanian news outlet as saying its, “hard to identify the (precise) impact crypto can have on the Jordanian economy.” He compared Jordan’s wariness to adapt to digital currencies with countries in the 1990s that were reluctant to embrace the internet.
TripleA, a cryptocurrency payment company, reported in January 2022 that approximately 129,000 Jordanians made cryptocurrency transactions in 2021.
Still, the government does not consider Bitcoin legal tender, warns its citizens against investing in an “unstable virtual asset,” and has restricted banks from dealing with Bitcoin.
But citizens of Jordan are free to buy and sell Bitcoin from exchanges that support their country, provided they’re not using the Bitcoin for any illicit purposes.
Source: Freeman Law
The government of Jordan has issued a warning discouraging the use of bitcoin and other similar systems.
The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. While it warned the public of the risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by small businesses and merchants.
Source: Wikipedia.org
In Jordan, the Government’s unfavorable attitude towards cryptocurrency has fostered a hostile legal environment for the new technology. The Central Bank of Jordan (CBJ) enacted legislation that prohibits all banks, currency exchange companies, financial entities, and payment service providers from facilitating any cryptocurrency transactions, including Bitcoin. Consequently, cryptocurrency trading is virtually prohibited under the laws of Jordan.
Source: Freeman Law
Cryptocurrencies, which are digital assets designed to operate as a medium of exchange, could help revitalize Jordan’s semi-rentier economy, which heavily relies on migrant remittances. Such digital assets pave the way for efficient, low-cost cross-border money transfers, which would allow Jordanians abroad to transfer money into the Kingdom easily.
But the Central Bank prohibited cryptocurrency even before engaging in research on the topic. According to documents made available to Jordan News by Maher Mahrooq, director of the Association of Banks in Jordan, the CBJ first sent out a circular prohibiting “all banks, financial institutions, exchange companies, and payment card companies” from dealing with cryptocurrencies under any possible circumstance in February of 2014.
Source: Jordan News
About 129,000 Jordanians, mostly males, trade in cryptocurrencies, according to a January report by the TripleA cryptocurrency payment company.
Hindi explained, “I am currently investing around $12,000. Sometimes I make $2,000 over a period of months, and other times, I don’t make anything. Certain skills like proficiency in the English language, following the news, and trading about 500 different currencies are needed.”
However, the governor of Jordan’s Central Bank, Adel al-Sharkas, reiterated during a meeting of the parliamentary Committee on Economy and Investment on Jan. 30 that the Jordanian authorities continue to ban digital currencies.
“The ban was imposed for several reasons, most notably protecting its dealers due to their lack of experience in this field, the currency’s depreciation as a result of exchange rate fluctuations, the possible losses stemming from fraud, piracy, hacking and theft, and the absence of a legal framework that guarantees the right to appeal before judicial authorities, in addition to fear of laundering operations and financing terrorist organizations,” Sharkas added.
“Investing in cryptocurrencies is futile,” said Mufleh Akl, the former head of the Association of Banks in Jordan, told Al-Monitor. “It is a game of gambling and despair of the lack of profitable investment opportunities. We must educate young people that some companies commit fraud through investments in these currencies.”
But the Jordanian authorities’ ban on trading in these currencies has not prevented people from finding ways to buy them. Jordanians who trade in cryptocurrencies resort to brokers abroad or traditional methods such as paying cash to the owner of the currency, which he transfers electronically to their accounts.
“In Jordanian law, there is nothing criminalizing dealing in cryptocurrencies, but the Central Bank’s directives to banks forbid them from dealing in these currencies,” blockchain technology expert Moaz Khalifat explained to Al-Monitor.
Muhammad al-Srouji, a financial analyst focused on foreign exchange trading, told Al-Monitor that digital cryptocurrency is a strongly rising market. He said, “I think that legislators in Jordan are observing with caution and anticipation, despite the apparent ban.”
Source: Al-Monitor
The Jordanian government has taken a harsh stance on Bitcoin and other cryptocurrencies, at one point banning them entirely. However, the Bitcoin ban in Jordan was defeated in an appeal.
If you want to buy Bitcoin and cryptocurrency in Jordan, one of the easiest ways is through the cryptocurrency exchanges outlined above. There are several exchanges offering Bitcoin in Jordan, allowing you to select one based on your requirements and preferences using our guide. Different exchanges have different transaction fees, withdrawal limits, payment modes, and verification processes that need to be kept in mind before users select one.
Additionally, Bitcoin buyers need to keep in mind that certain exchanges might require you to get a wallet of your own before being able to buy the digital currency. Even if there is no requirement, it is recommended to have a wallet of your own for security reasons (preferably a hard)
Source: Buy Bitcoin Worldwide
Jordan has become the latest country to declare interest in developing a central bank digital currency (CBDC). The country’s central bank has reportedly been exploring the feasibility of a digital dinar, even as the governor said that the government might legalize digital currency trading if proper regulations and guidelines are put in place.
According to reports from local media agencies, Adel Al Sharkas, the governor of the Central Bank of Jordan (CBJ), revealed the CBDC plans during a recent meeting in which digital currencies were the focus of discussions. Unblock Media reports that Al Sharkas announced that the CBJ wants to join the likes of China and The Bahamas, who have both made significant progress with the CBDCs, with the latter being the first country globally to roll out a CBDC.
Source: Coingeek
Notable Hacks / Frauds / Scams
The governor of Jordan’s Central Bank, Adel al-Sharkas, reiterated during a meeting of the parliamentary Committee on Economy and Investment on Jan. 30 that the Jordanian authorities continue to ban digital currencies.
“The ban was imposed for several reasons, most notably protecting its dealers due to their lack of experience in this field, the currency’s depreciation as a result of exchange rate fluctuations, the possible losses stemming from fraud, piracy, hacking and theft, and the absence of a legal framework that guarantees the right to appeal before judicial authorities, in addition to fear of laundering operations and financing terrorist organizations,” Sharkas added.
“Investing in cryptocurrencies is futile,” said Mufleh Akl, the former head of the Association of Banks in Jordan, told Al-Monitor. “It is a game of gambling and despair of the lack of profitable investment opportunities. We must educate young people that some companies commit fraud through investments in these currencies.”
But the Jordanian authorities’ ban on trading in these currencies has not prevented people from finding ways to buy them. Jordanians who trade in cryptocurrencies resort to brokers abroad or traditional methods such as paying cash to the owner of the currency, which he transfers electronically to their accounts.
Source: Al-Monitor
The CBJ warned that cryptocurrencies face high risks of hacking and other financial crimes. For example, a cryptocurrency exchange named EXMO was hacked in 2020. Consequently, EXMO investors lost approximately $52 million in cryptocurrency assets. Finally, the CBJ warned that cryptocurrency offers no consumer protection measures. Consequently, investors that lose funds to hacking attacks, like the EXMO traders, have no viable methods of recovering the stolen funds. Furthermore, finding hackers’ identity is difficult because cryptocurrency is largely anonymous. As a result, the EXMO traders have no legal recourse to redress their financial injuries.
For all these reasons, the CBJ warned investors in Jordan to abstain from cryptocurrency investments and banned financial institutions operating in Jordan from trading cryptocurrencies. Therefore, Jordan does not provide a favorable legal environment for cryptocurrency investors.
Source: Freeman Law
In line with Central Bank’s aim to be a FinTech hub in the region, CBJ announced the establishment of a (Regulatory Sandbox) that allows pioneers and entrepreneurs in the financial technology realm to approach CBJ and apply for regulatory mentorship and support, and the availability to test FinTech solutions before going live to increase the chances of success in the market. The Regulatory Sandbox will be functioning by end of June 2018. Furthermore, CBJ assures its continuous support for solutions that leverage new innovations like Blockchain taking into consideration solutions that enhance financial access to digital financial services in a customer-friendly, secured, and efficient manner, having in place the highest cyber security measures in the financial sector.
In addition, CBJ stresses its policy of banning cryptocurrencies in the Jordanian financial system due to the high risks associated with dealing with them in financial institutions and the national economy. CBJ is closely observing developments in cryptocurrencies and is conducting in-depth research in collaboration with other central banks and international institutions.
Source: cbj.gov.jo
