Is Jordan Set to Become the Next Crypto Hub in the Middle East?

With ambitious plans to regulate virtual assets within a year and a blockchain strategy set for 2025, Jordan aims to foster a robust digital economy while addressing Financial Action Task Force (FATF) grey list concerns.

• Jordanian government to regulate virtual assets within a year
• Blockchain strategy approved for 2025
• Addressing FATF grey list concerns

King Abdullah II has taken decisive action, expanding the roles of the National Council for Future Technology and the Jordanian Securities Commission (JSC) to navigate the growing world of virtual assets. The JSC, which oversees financial markets, will now define the requirements for entities dealing with these assets, develop necessary legal and technological infrastructures, and regulate crypto trading platforms. A group of ministers, chaired by the Minister of Digital Economy and Entrepreneurship and including representatives from the Central Bank of Jordan and the National Cybersecurity Center, has been formed to shepherd this regulatory journey.

The urgency of these initiatives was partly spurred by Jordan’s placement on the FATF grey list in February 2023 due to risks associated with virtual assets and the need to address deficiencies in money laundering and terrorist financing risk assessments. However, it’s worth celebrating that Jordan was successfully removed from the grey list in October 2023, showcasing significant progress in meeting international standards. The FATF grey list is a warning list for countries that need to improve their efforts against money laundering and terrorist financing.

Virtual assets are digital representations of value that can be digitally traded or transferred and used for payment or investment purposes. Amid these regulatory strides, the adoption of cryptocurrencies in Jordan is on an upward trajectory. A 2023 report from Triple A, a company analyzing crypto trends, shows that cryptocurrency ownership among Jordanians increased from 1.25% in 2022 to 1.5% in 2023. This rise indicates a growing interest in digital currencies, where ownership means having a digital wallet with cryptocurrencies in it.

Parallel to the regulatory framework, the Jordanian Council of Ministers has approved a blockchain strategy for 2025, aiming to revolutionize governmental services, enhance transparency and integrity, and boost innovation across various sectors. Blockchain is a decentralized ledger technology that records transactions securely and transparently. This strategy is expected to enhance digitization efforts, simplify administrative functions, and support innovation, particularly in the telecom and IT sectors. As King Abdullah II’s government pushes forward, it’s clear that blockchain is seen as a tool to streamline government operations and foster a more transparent and innovative economy.

While the promise of digital assets and blockchain technology is undeniable, it’s essential to approach this revolution with a balanced perspective. The potential for scams and unrealistic price predictions must be critically assessed. Jordan’s regulatory framework, while a step in the right direction, must navigate these challenges carefully, ensuring that the path to a digital economy is both secure and inclusive. After all, not all that glitters in the crypto world is gold.

The journey towards a digital economy in Jordan reflects a broader global trend towards recognizing the transformative power of cryptocurrencies and blockchain. Yet, as we champion decentralization and the ideals of e/acc (effective accelerationism), we must also acknowledge that not all altcoins and blockchains will revolutionize finance in the way Bitcoin does. Each, however, has its role in pushing the boundaries of what’s possible in finance and technology. Bitcoin may be the king of cryptocurrencies, but the ecosystem thrives on diversity and innovation.

Key Takeaways and Questions

• What is the main goal of the virtual and digital asset regulatory framework in Jordan?

  The main goal is to align with global standards and foster a robust digital economy in Jordan.

• Why was Jordan placed on the FATF grey list?

  Jordan was placed on the FATF grey list due to risks associated with virtual assets and the need to address strategic deficiencies in money laundering and terrorist financing risk assessments.

• What is the expected timeline for the creation of the virtual asset regulatory framework?

  The framework is expected to be created within a year.

• How has the ownership of cryptocurrency in Jordan changed from 2022 to 2023?

  Cryptocurrency ownership in Jordan increased from 1.25% in 2022 to 1.5% in 2023.

• What are the key objectives of Jordan’s blockchain strategy for 2025?

  The key objectives include improving governmental services, enhancing transparency and integrity, and boosting innovation in various economic sectors.

• How does the blockchain strategy aim to benefit Jordan’s economy?

  It aims to enhance digitization efforts, simplify administrative functions, save time and cost for governmental services, and support innovation, particularly in the telecom and IT sectors.

• What role does the Jordanian Securities Commission play in the new regulatory framework?

  The JSC is tasked with defining requirements for entities engaging in virtual assets, developing legal and technology infrastructure, and licensing and regulating crypto trading platforms.

“The initiative aims to align with global standards and foster a robust digital economy in Jordan.”

“Jordan was placed on the FATF grey list because of risks in virtual assets.”

“Introducing blockchain is aimed to improve transparency and integrity.”

As Jordan navigates its path through the digital and blockchain realms, the balance between fostering innovation and guarding against the dark sides of crypto will be crucial. While we celebrate the potential for decentralization and disruption, we must also remain vigilant against the scammers and unrealistic promises that often accompany new technologies. The journey ahead for Jordan, and indeed the global crypto community, is one of cautious optimism and relentless scrutiny.