Financial Institutions Crypto Warning in Saudi Arabia: What Banks Are Forbidden to Do

Financial Institutions Crypto Warning in Saudi Arabia: What Banks Are Forbidden to Do

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When you walk into a bank in Riyadh or Jeddah, you won’t find a single teller offering to help you buy Bitcoin. You won’t see ads for crypto wallets on their mobile apps. And if you ask about investing in Ethereum, you’ll likely get a firm, written warning - not advice. That’s because financial institutions in Saudi Arabia are strictly forbidden from touching cryptocurrencies.

Why Banks Can’t Touch Crypto

The Saudi Central Bank, known as SAMA (Saudi Arabian Monetary Authority), issued its first official warning about cryptocurrencies back in 2017. At the time, it was a cautious heads-up: digital assets like Bitcoin were risky, unregulated, and not backed by any government. But by December 2018, the message turned into a hard stop. A joint committee made up of SAMA and other financial regulators declared virtual currencies “illegal and unlicensed” in the Kingdom. That wasn’t just a suggestion. It was a directive.

The Ministry of Finance doubled down in 2019, reminding everyone that cryptocurrencies are “neither legally recognized nor regulated by any official entities in Saudi Arabia.” That means no bank, no credit union, no payment processor - not even a fintech startup - can legally buy, sell, hold, or trade Bitcoin, Ethereum, or any other crypto asset. If they do, they risk fines, license suspension, or even criminal charges.

What’s more, the rules don’t just apply to direct trading. Banks can’t even offer crypto-related services like wallet storage, custody, or exchange platforms. They can’t list crypto on their websites. They can’t market it. They can’t even use Saudi national symbols - like the national flag or the word “Saudi” - in any crypto promotion. Violating that rule triggers legal action.

The Legal Gray Zone

Here’s the twist: there’s no specific law that says “cryptocurrencies are banned.” Instead, Saudi Arabia operates under a risk-averse regulatory framework. Cryptocurrencies aren’t written into the country’s financial laws - which means they’re not legal, but they’re also not explicitly outlawed in a criminal code sense. This creates a strange limbo.

The Anti-Money Laundering Law (AML) and the Law on Combating Terrorist Financing (CFT), both passed in 2017, define “funds” broadly to include “intangible assets” and “economic resources obtained through electronic systems.” That sounds like it could cover crypto. But regulators haven’t applied these laws to crypto businesses because they don’t recognize them as legitimate financial instruments. So while you could theoretically be prosecuted under AML rules for using crypto to launder money, there’s no official system to monitor or license crypto exchanges - which makes enforcement nearly impossible.

This ambiguity is intentional. Regulators don’t want to encourage crypto use, but they also don’t want to give the impression that it’s completely off-limits - especially since blockchain tech is being actively developed behind closed doors.

Project Aber: The Crypto Paradox

While your local bank is forbidden from touching Bitcoin, the Saudi Central Bank is quietly building its own digital currency - with the United Arab Emirates. Called Project Aber, it’s a joint central bank digital currency (CBDC) initiative launched in 2019. Unlike Bitcoin, this isn’t for public use. It’s for banks - to settle cross-border payments faster and cheaper.

Project Aber isn’t crypto. It’s not decentralized. It’s not anonymous. It’s a government-controlled digital riyal, built on blockchain tech. And it’s part of a much bigger strategy: Saudi Arabia wants to lead in financial innovation - but only on its own terms.

That’s why global giants like Goldman Sachs and Rothschild are setting up tokenization projects in the Kingdom. They’re not trading Bitcoin. They’re turning traditional assets - like bonds, real estate, and trade finance - into digital tokens on permissioned blockchains. These tokens are traceable, regulated, and tied to real-world value. They’re legal. They’re safe. And they’re exactly what SAMA wants to see.

Teens flying with VPN jetpacks past a blocked bank vault, trading crypto secretly.

Why the Youth Are Ignoring the Warning

Despite the banking ban, crypto adoption in Saudi Arabia is booming. Over 60% of the population is under 30. Many of them are tech-savvy, financially curious, and tired of traditional banking limits. They’re using peer-to-peer platforms, offshore exchanges, and VPNs to trade crypto daily.

A 2024 survey by a regional fintech group found that nearly 1 in 4 Saudis aged 18-29 have bought or traded cryptocurrency. That’s higher than in the UAE, Kuwait, or Qatar. And it’s growing fast. Local forums, Telegram groups, and Instagram influencers are filled with advice on how to buy Bitcoin without a bank account - using cash transfers, gift cards, or crypto ATMs in shopping malls.

The government knows this is happening. But cracking down on individual traders is nearly impossible. You can’t arrest thousands of young people for buying Ethereum. So instead, they’ve focused their enforcement on institutions - banks, exchanges, and businesses that might make crypto look official or safe.

Sharia and Crypto: The Misunderstood Debate

Some online sources claim that a Saudi religious leader issued a fatwa approving Bitcoin as Sharia-compliant. That’s not true. No official religious authority has issued such a ruling. In fact, the Saudi Council of Senior Scholars - the country’s top Islamic legal body - has never publicly endorsed any cryptocurrency.

The real concern among religious scholars isn’t necessarily crypto itself. It’s speculation, gambling (gharar), and the lack of asset backing. Many view Bitcoin as a form of unregulated gambling - not a currency. That’s why the official stance leans toward caution. Even if blockchain tech is seen as useful, decentralized digital money doesn’t fit the Islamic financial model of asset-backed, transparent transactions.

SAMA robot placing a digital riyal into Project Aber blockchain puzzle.

What Happens If You Try to Use Crypto Anyway?

If you’re an individual, you won’t get arrested for buying Bitcoin on Binance. But you’re on your own. No legal recourse if you get scammed. No protection if your exchange shuts down. No way to recover funds if you send crypto to the wrong address.

If you’re a business - even a small startup - and you accept crypto as payment, you’re risking your license. SAMA has cracked down on local companies that advertised crypto services. In 2023, a Riyadh-based fintech firm was shut down for offering “crypto savings accounts.” Their website was taken down. Their directors were summoned for questioning.

Banks are even stricter. If you try to use your Saudi bank account to fund a crypto purchase, the transaction will likely be blocked. If you repeatedly attempt it, your account could be flagged for “suspicious activity.” And if you’re a business owner trying to pay suppliers with crypto? Don’t expect your bank to help you convert it back to riyals.

The Future: Will Saudi Arabia Ever Legalize Crypto?

Don’t expect a full legalization anytime soon. But don’t expect a permanent ban either.

Saudi Arabia is clearly experimenting with digital finance - just not the kind you find on Coinbase. The future likely involves regulated tokenization of assets, CBDCs for banking, and maybe even licensed crypto derivatives for institutional investors - all tightly controlled, Sharia-compliant, and fully traceable.

For now, the message is clear: cryptocurrencies are not money in Saudi Arabia. They’re high-risk digital assets. And the government wants financial institutions to stay far away.

The people? They’re already ahead of the rules. Whether that changes depends less on the law - and more on whether the government can build a system that satisfies both financial stability and the demand from its young, tech-driven population.

Is cryptocurrency illegal in Saudi Arabia?

Cryptocurrencies are not explicitly banned by law, but they are not legally recognized either. The Saudi Central Bank (SAMA) and the Ministry of Finance have issued clear warnings that financial institutions cannot deal in crypto. For individuals, it’s a gray area - you won’t be arrested for buying Bitcoin, but you have no legal protection if something goes wrong.

Can Saudi banks offer crypto services?

No. Saudi banks are strictly prohibited from offering any crypto-related services - including trading, custody, wallet storage, or even promoting crypto. Any bank that does so risks losing its license and facing legal action from SAMA.

Why is Saudi Arabia building blockchain tech if crypto is banned?

Saudi Arabia is investing in blockchain for institutional use - like central bank digital currencies (Project Aber) and tokenizing bonds or trade finance. These systems are controlled, traceable, and regulated. They’re not decentralized crypto. The goal is innovation without the risks of unregulated digital assets.

Can I use crypto to pay for goods in Saudi Arabia?

Technically, yes - if a business accepts it. But there’s no legal framework to protect you. No tax reporting rules. No consumer rights. And if the business gets audited, they could be penalized for using unregulated assets. Most businesses avoid it to stay compliant.

Is there a chance Saudi Arabia will legalize crypto in the future?

Not in the way you might think. Full legalization of Bitcoin or Ethereum as currency is unlikely. But regulated, tokenized assets - backed by real value and issued by licensed entities - could become common. The government is building the infrastructure now. When the time comes, it’ll be under strict control, not open-market trading.

14 Comments

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    Jon Visotzky

    December 6, 2025 AT 04:53
    So banks can't touch crypto but the government is building its own blockchain? That's like banning pizza but opening a gourmet pizzeria in the basement. Weird flex but okay.
    Also why are we even talking about this like it's a mystery? It's Saudi Arabia. They control everything, even the air you breathe.
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    Isha Kaur

    December 6, 2025 AT 18:42
    I find it fascinating how the regulatory ambiguity actually serves a purpose here-it's not about outright prohibition but about maintaining absolute control over financial narratives. The youth are using P2P platforms because they've grown up with smartphones and global access, and no amount of banking warnings can stop a generation that sees money as code rather than paper. The real story isn't the ban, it's how quietly the state is building its own digital future while pretending the public isn't already living in it.
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    Glenn Jones

    December 8, 2025 AT 15:25
    YOOOOO THIS IS THE MOST EPIC GOVERNMENT DOUBLE STANDARD EVER
    THEY'RE BUILDING A BLOCKCHAIN BUT SAY BITCOIN IS ILLEGAL??
    THEY WANT TO BE THE FUTURE BUT ARE AFRAID OF THE PRESENT??
    THIS IS LIKE A COPS SHOW WHERE THE POLICE ARE USING DRONES TO CATCH DRUG DEALERS BUT SAY DRUGS ARE ILLEGAL AND THEN GET CAUGHT USING THEM
    THEY'RE THE DRUG DEALERS AND THE COPS AND THE JUDGE AND THE JAILER AND THEY'RE STILL SURPRISED WHEN KIDS BUY CRYPTO ON TELEGRAM??
    THEY'RE SO OUT OF TOUCH THEY THINK THEY CAN CONTROL DIGITAL MONEY WITH A FAX MACHINE
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    Tara Marshall

    December 9, 2025 AT 20:12
    The key here is institutional control. SAMA doesn't fear crypto-it fears loss of oversight. Project Aber isn't a contradiction, it's the endpoint. Tokenized bonds, CBDCs, regulated platforms-all traceable, all auditable, all under the kingdom’s thumb. Individual traders? They're noise. The system isn't broken, it's just designed to exclude them.
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    Nelson Issangya

    December 10, 2025 AT 04:00
    Let me be clear-this isn’t about religion or safety. It’s about power. The government doesn’t want people to have financial autonomy. They want to be the only ones who can decide what money is. And yeah, the youth are out here building their own economy while the old guard clings to paper and permission. This isn’t a ban. It’s a rebellion waiting to happen.
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    Adam Bosworth

    December 10, 2025 AT 06:18
    I swear to god if one more person says 'it's not illegal it's just not recognized' I'm gonna scream
    THEY BANNED IT WITH A PRESS RELEASE
    THEY'RE NOT LAWSY THEY'RE JUST TOO COWARDY TO WRITE A LAW
    AND NOW THEY'RE BUILDING THEIR OWN CRYPTO AND CALLING IT 'INNOVATION'
    THEY WANT TO BE THE ONLY ONES WHO CAN BUY AND SELL DIGITAL ASSETS
    THEY'RE THE MONOPOLY IN A GAME WHERE EVERYONE ELSE IS PLAYING FREE TO PLAY
    AND THE KIDS? THEY'RE JUST PLAYING THE GAME WITHOUT THE RULEBOOK
    THEY'RE WINNING
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    Uzoma Jenfrancis

    December 11, 2025 AT 04:34
    This is why the West misunderstands the Gulf. We do not fear innovation. We control it. Your crypto is chaos. Our blockchain is order. Your banks are weak. Our central bank is sovereign. You call this repression. We call it wisdom. The youth will learn. The state always wins.
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    Renelle Wilson

    December 11, 2025 AT 22:59
    It’s important to recognize the cultural and religious context here. Islamic finance emphasizes asset-backed transactions, transparency, and the avoidance of excessive risk. While blockchain technology is not inherently incompatible with these principles, decentralized cryptocurrencies often operate without clear ownership, valuation, or accountability-making them difficult to reconcile with Sharia frameworks. The government’s stance, while restrictive, is not arbitrary-it reflects a deeply held economic philosophy. That doesn’t mean it’s perfect, but it does mean it’s rooted in something larger than fear.
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    Elizabeth Miranda

    December 12, 2025 AT 16:58
    I lived in Riyadh for two years. The crypto scene was wild-people trading via WhatsApp, using gift cards to buy BTC, even crypto ATMs in malls. The government turns a blind eye because arresting 20-year-olds for buying Ethereum would look ridiculous on the global stage. But they’ll crush any business that tries to make it look legit. Smart. Cold. Effective.
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    Chloe Hayslett

    December 13, 2025 AT 12:50
    Oh look the Saudis are finally doing something smart for once. Let the little kids play with their digital toys while the adults build real systems. You think Bitcoin is money? It's a meme with a ledger. Project Aber is the future. Your crypto wallet is a fantasy. Our digital riyal is the law.
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    Jonathan Sundqvist

    December 14, 2025 AT 01:20
    I don't get why people are surprised. You think the Saudis are gonna let some guy on Telegram sell them digital coins? They're the ones who banned music videos in the 90s. Now they're just doing it with blockchain. The youth will do what they want. The state will punish the companies. Everyone wins.
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    Jerry Perisho

    December 14, 2025 AT 09:55
    The real story is the disconnect between policy and reality. The ban targets institutions to prevent systemic risk. But the market is decentralized, peer-to-peer, and global. You can't regulate what doesn't touch your banks. The government’s strategy isn’t to stop crypto-it’s to make sure it never becomes part of the official financial system. That’s not ignorance. That’s strategy.
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    Manish Yadav

    December 15, 2025 AT 16:13
    This is all haram anyway. Crypto is gambling. No one should be trading it. The government is right. The youth are stupid. They think they are smart but they are just losing money. God will punish them for following the devil's money.
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    Krista Hewes

    December 16, 2025 AT 22:37
    i just dont get why they dont just legalize it and tax it like cigarettes or alcohol
    theyre already spending billions on blockchain tech
    why not let people trade and take a cut?
    the youth are gonna do it anyway
    and if you dont give them a safe way to do it
    theyll get scammed and blame the government
    and then you get protests
    and then you look bad
    why not just be the one in charge?
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