Saudi Economist Urges GCC for Unified Crypto Regulations Amid Divergent Regional Policies

Ihsan Buhulaiga, a prominent Saudi economist, is pushing for a unified regulatory framework for cryptocurrencies among the Gulf Cooperation Council (GCC) countries to streamline the use of digital assets as payment tools across the region.

• Saudi economist urges GCC for unified crypto regulations
• UAE emerges as a crypto hub amidst EU’s MiCA regulations
• Saudi critics oppose cryptocurrencies on religious and financial grounds

Ihsan Buhulaiga, a former member of the Saudi Shura Council, has thrown a spotlight on the need for coordinated cryptocurrency regulation within the GCC. The Gulf Cooperation Council (GCC) includes Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman. Buhulaiga’s remarks underscore a pressing need for a roadmap that could harmonize the regulatory landscape across these nations. “Saudi Arabia and other countries in the region need to think about the rapid developments in this type of currency. They need a roadmap in this respect,” Buhulaiga stated.

His call comes at a time when Saudi Arabia maintains a stringent stance against cryptocurrency transactions, while the UAE is rapidly becoming a haven for crypto ventures. The UAE’s progressive approach is particularly attractive to those escaping the EU’s Markets in Crypto-Assets (MiCA) regulation, which becomes effective on December 30. MiCA imposes strict rules about holding reserves, such as a 1:1 reserve requirement for fiat-backed stablecoins, prompting many to seek more favorable conditions elsewhere. In the world of crypto, it seems the only thing faster than a transaction is regulatory arbitrage, the practice of taking advantage of different regulations across countries to maximize financial benefits.

While Buhulaiga pushes for unity, the UAE has taken a different approach by actively developing regulatory measures to attract crypto ventures. The UAE has already approved a new stablecoin, AE Coin, fully backed by reserves, highlighting its progressive stance on digital assets. Buhulaiga warns that without a unified approach, capital will flee to more permissive GCC countries. “What one GCC country does not allow can be done in another. If I cannot invest in cryptocurrencies in Saudi Arabia, I will take my money and go to the UAE or Bahrain,” he noted.

However, not everyone in Saudi Arabia shares Buhulaiga’s vision. Abdul Rahman bin Nahi, a frequent critic of cryptocurrencies in Saudi media, opposes their adoption, citing religious, financial, and security risks. He argues that cryptocurrencies could lead to economic and social damage due to their unstable nature and widespread speculation.

“Islam is based on transparency and fairness in financial dealings and the need to avert big risks,” bin Nahi asserts, reflecting a deeper cultural and ethical debate within the kingdom.

Saudi Arabia’s crypto ban is not just a policy, it’s a statement against the global trend towards digital currencies. Saudi critics’ opposition to crypto sounds more like fear of change than a well-founded economic argument.

This divergence in views within the GCC mirrors broader global trends, including anticipated crypto-friendly policies from the U.S. under President Donald Trump. These policies, which might include integrating cryptocurrencies into the Federal Reserve’s reserves, are seen as a potential catalyst for further growth in cryptocurrency adoption worldwide. Trump’s influence, while seemingly out of place, could encourage GCC countries to adopt more favorable policies, aligning with the global push towards digital assets. Trump’s crypto policies are expected to drive global adoption.

The GCC’s approach to cryptocurrencies could set a precedent for other regions grappling with similar regulatory challenges. While Buhulaiga’s call for unity aims to mitigate risks and foster innovation, the resistance from figures like bin Nahi highlights the complex interplay of economic, religious, and security considerations in the crypto debate.

The push for a unified regulatory framework among GCC countries could be a game-changer for the region’s economic landscape, potentially attracting more crypto-related businesses and fostering a more integrated financial ecosystem. However, the path forward remains fraught with challenges, as differing national priorities and cultural values continue to shape the discourse around digital currencies.

Bitcoin, as a neutral, borderless currency, could greatly benefit from unified regulations. A harmonized approach could accelerate economic growth and innovation in the GCC, aligning with the philosophy of effective accelerationism (e/acc), which champions rapid technological advancement.

Key Takeaways and Questions

• What is the main proposal by Ihsan Buhulaiga?

  Ihsan Buhulaiga proposes that GCC countries should develop a unified regulatory framework for cryptocurrencies to manage their use as payment tools effectively.

• How does Saudi Arabia’s stance on cryptocurrencies differ from the UAE?

  Saudi Arabia maintains a strict stance against cryptocurrency transactions, while the UAE is actively developing regulatory measures to attract crypto ventures and has approved a new stablecoin.

• What impact could the EU’s MiCA regulation have on global crypto ventures?

  The stringent reserve requirements of MiCA could push crypto and stablecoin ventures to relocate to more favorable jurisdictions like the UAE.

• Why does Abdul Rahman bin Nahi oppose cryptocurrencies?

  Abdul Rahman bin Nahi opposes cryptocurrencies due to their potential economic and social damage, their unstable nature, widespread speculation, and incompatibility with Islamic financial values.

• How might U.S. President Donald Trump’s policies influence global cryptocurrency adoption?

  Trump’s anticipated pro-crypto policies, including potential integration into the Federal Reserve’s reserves, are seen as a catalyst for continued global growth in cryptocurrency adoption.