Kuwait Finance House (KFH) recently ran its first successful blockchain-based international transaction over a testnet with Al Rajhi, a Saudi bank, using Ripple technology. According to ICOExaminer this is the first known such transaction to have been undertaken by a banking institution in Kuwait.
KFH ran a television ad on the development, outlining the “high security” of the technology, now awaiting final approval from the Central Bank of Kuwait.
Kuwait’s own legal codes – which are formally secular – are unlikely to be representative in terms of the wider region’s regulatory dispositions towards cryptocurrency adoption. The development of the cryptocurrency phenomenon more generally within the Gulf States will likely depend very heavily on favorable interpretations within Sharia Law.
The Kuwaiti announcement has come on the same day that Saudi authorities confirmed that they consider both cryptocurrencies and its trading platforms illegal. This is largely because they fall outside of the purview of traditional regulatory oversight.
To date, only Stellar’s XLM coin has been awarded with formal Sharia Certification – by the Central Bank of Bahrain – making it the first recognized cryptocurrency in the region.