The Central Bank of Kuwait, or CBK, states that crypto assets are not real currencies even though they are commonly called cryptocurrencies.
The recent market-wide price crash caused central banks worldwide to issue warnings about the risks of investing in cryptocurrencies. On Saturday, the Central Bank of Kuwait was no exception, and on Saturday issued a statement to warn the public about volatility in cryptocurrency markets. The Central Bank of Kuwait, or CBK, states that crypto assets are not real currencies even though they are commonly called cryptocurrencies.
“A “real” currency is one issued by the state.”
According to the Central Bank of Kuwait’s statement, only a lawful state can issue real currency as a symbol of sovereignty: “The real currency is regulated by state authorities such as central banks or monetary institutions. It is considered and accepted as a store of value and legal tender. It serves as a reliable medium for exchange.” The statement noted Dogecoin among the most prominent cryptocurrencies by market cap, Bitcoin, and Ether. Dogecoin is known for its meteoric rise earlier this year following Elon Musk’s repeated mentions of the meme-originated coin on social media.
The central bank warning is part of its crypto-aware program.
The Central Bank of Kuwait noted that the warning is a part of their ‘s Diraya campaign, which translates to “Be Aware” in Arabic. Managed by the Kuwait Banking Association, the campaign aims to raise financial awareness in the country and encourage social responsibility activities across the Kuwaiti banking sector. After listing the typical beef regarding cryptocurrencies, such as money laundering, fraud, and unauthorized transactions, the central bank further mentioned the environmental cost of energy-intensive crypto mining operations. As reported earlier, Tesla would stop accepting Bitcoin as a form of payment due to its potentially harmful effect on the environment.