A Jordanian official told The New Arab that work is currently underway to complete the necessary legislative framework to regulate virtual assets, including crypto, following the issuance of a law regulating this activity.
According to the official, a set of regulations and instructions will be issued after the law is passed. These regulations aim to regulate and control the use of virtual assets and cryptocurrencies, ensuring the protection of all parties and stakeholders, avoiding risks, and ensuring compliance with international practices and standards in this field.
The Governor of the Central Bank of Jordan, Adel Al Sharkas, emphasized the importance of establishing legal and regulatory foundations for licensing online platforms that will enable Jordanian citizens to purchase crypto.
He explained that these platforms will be licensed and monitored by the Jordan Securities Commission to ensure transparency and investor protection.
He pointed out that the decision aligns with Jordan’s vision to promote the digital economy and support innovation, and that the new regulatory framework will work to control risks associated with these assets, such as money laundering and terrorist financing, in line with the recommendations of the Financial Action Task Force (FATF).
He also explained that licensing these platforms will enable banks to engage with them, as they will be linked to accredited global platforms. The Jordan Securities Commission will monitor the entire process to ensure it is conducted in a transparent and secure investment environment for Jordanian citizens.
He added that virtual assets include crypto like Bitcoin, and that licensing will help protect citizens from fraud and ensure they engage with accredited and secure platforms. He considered this step an important step toward regulating digital assets in Jordan, strengthening the country’s position as a safe digital investment destination.
For his part, economic expert Mounir Dayeh warned of the dangers of fake exchanges and crypto companies, which have cost Jordanians hundreds of millions of dinars in losses over the past two years.
He explained that these companies engage in illegal activities by opening headquarters and branches within Jordan and collecting huge sums of money under the pretext of trading on global stock exchanges.
Dayeh told The New Arab that dealing with these companies continues to attract widespread interest among Jordanians, estimated at around 250,000 people over the past two years, seeking to make quick profits, as these companies claim.
He explained that the law regulating the work of crypto companies was issued only about three months ago, stressing that despite its importance, it came too late, after citizens incurred huge losses due to the lack of oversight and legislation in previous years.
Based on available information, Dayeh estimated that the damages incurred by Jordanians as a result of dealing with virtual assets and crypto over the past two years amounted to approximately $700 million, in addition to the smuggling of approximately $350 million abroad. He warned that these practices threaten more individuals and called for urgent action to protect traders and curb widespread fraudulent practices.
He explained that these companies typically begin by offering fictitious profits to investors to boost confidence and encourage them to increase their investments, but they close their doors and disappear completely when the invested amounts increase.
The Jordanian Council of Ministers recently decided to establish a comprehensive regulatory and legal framework with clear governance for dealing in virtual and digital assets within one year.
According to a government statement, the decision comes in line with the transformations in the global financial sector, most notably the introduction of digital assets, which represent an opportunity for creative Jordanian youth to engage in the digital economy. This is particularly true given that a number of the region’s most prominent crypto platforms were founded by Jordanians.
The Council of Ministers tasked the Jordan Securities Commission with taking the necessary measures to define the requirements and conditions for entities wishing to deal in virtual assets and to develop the legal and technical arrangements necessary to license and accredit global digital asset trading platforms. The procedures are to be completed within one year.
The Board of Commissioners of the Jordan Securities Commission also conducted a comprehensive preliminary study to determine the technical, financial, and legislative requirements for regulating the activities of these platforms.
The study concluded the need for a regulatory framework for the governance of digital asset transactions that aligns with international standards for financial markets and combating financial crime, drawing on successful international experiences in this regard.
Regulating this sector in Jordan provides opportunities to enter the global digital economy and achieve economic and investment gains, contributing to attracting investments and providing job opportunities for young entrepreneurs, similar to the experiences of the UAE, Bahrain, Turkey, the United States, European countries, and Japan.
The Central Bank of Jordan defined virtual currencies as digital value that can be traded or transferred electronically and used for payment or investment.
It clarified that they do not include digital representations of paper currencies or securities issued by licensed entities within Jordan, like Bitcoin.
Before the government’s recent move toward regulation, the Central Bank of Jordan had warned against dealing in these currencies due to the high risks they entail, including price fluctuations, financial crimes, cybercrime, and loss of value. This is in addition to the lack of legal and regulatory oversight, given that they are not issued by legally accredited or licensed entities within the Kingdom.
