Central Bank of Jordan Blocks Financial Companies from Bitcoin

Feb 23, 2014 at 17:50 UTC
Updated Jul 24, 2014 at 11:38 UTC
NEWS

It was the Central Bank of Jordan’s (CBJ) turn to issue a digital currency warning this week, advising the public of the risks associated with the use of the financial tools, and blocking financial companies from engaging in bitcoin business.

“Recently, a global phenomenon of trading a virtual currency called bitcoin became active around the world,” the bank noted, adding:

“CBJ seeks to protect citizens and the investors, by warning them that virtual currencies are not legal tender and 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 backed by underlying international commodities or gold.”

The Bank’s executive director of its payment services department, Maha Bahu, told The Jordan Times that the Kingdom’s banks, financial companies, payment processors and currency exchangers had also received a circular “prohibiting them from dealing with virtual currencies, particularly in bitcoins”.

She said the CBJ had been “following the issue of bitcoin very closely over the past two months”. Another official source told the paper that some people in Jordan and around the region were already trading digital currencies “using phoney names”.

Locals undeterred

A member of the Jordan Bitcoin Group told CoinDesk they were not too discouraged by the announcement, and would continue to advocate for bitcoin in the local media:

“The warning is unfortunate, but it isn’t stopping small businesses and merchants from accepting bitcoin. This Saturday, a cafe started accepting bitcoin, and is already attracting new customers.”

The CBJ’s statement is the latest in a string of similar decrees to come out of central banking authorities since the end of last year, and the third we’ve seen from the Middle East after the nearby central banks of Lebanon and Israel issued warnings on 19th December and 19th February, respectively.

Central banks and bitcoin

The central bank statements, which have ranged in tone from advisory to graver warnings of illegal activity and even bans, have all included the common themes that bitcoin and others are not officially regarded as currencies, cannot be guaranteed by central banks and may suffer dramatic price fluctuations.

However, bitcoin and digital currency news has been scarce from the Middle East, so the overall affect of the announcement is perhaps unclear.

Other than the bank warnings, the only other story to emerge recently was Dubai’s Pizza Guys starting to accept bitcoin just a few days ago.

Treasury of Petra image via Shutterstock

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