Saudi Arabia has officially declared that trading in digital currencies such as bitcoin is illegal in the country.

A standing committee comprising of Saudi Arabian regulators this stated that “the unauthorized virtual currencies are illegal inside the Kingdom of Saudi Arabia.”

The committee was formed by the supreme decree headed by the Capital Market Authority (CMA), the Ministry of Ministry of Interior membership, the Ministry of Media, the Ministry of Commerce and Investment, and the Saudi Arabian Monetary Authority (SAMA).

“The standing committee warns against trading in the digital currencies or what is known as virtual currency for their negative consequences and high risks on traders as they are out of government supervision. The committee assured that virtual currency including, for example but not limited to, the Bitcoins are illegal in the kingdom and no parties or individuals are licensed for such practices,” the announcement reads.

The committee further cautioned the citizens against “drifting after such illusion and get-rich scheme”, citing high regulatory, security, and market risks.

Saudi Arabia, however, is optimistic about the underlying blockchain technology. Earlier this year, the SAMA launched an initiative, FintechSaudi, in order to support the fintech ecosystem and promote the Kingdom as a fintech hub.

"Although ATMs, credit cards, online banking services and cellular phones are all products that use fintech, today we are witnessing tangible progress in the fintech field. This progress is driven by the growth in the use of big data and smart phones, the increase in demand for financial services that suit consumers' personal aspirations, and the appearance of new technical trends such as Artificial Intelligence and Blockchain, which will lead to a major shift in the provision of fintech services," Governor of SAMA Dr. Ahmed bin Abdulkarim Alkholifey said at the time.