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.
It is the first known such transaction to have been undertaken by a banking institution in Kuwait – and was apparently so exciting that KFH decided to run a television advertisement on the development, outlining to Kuwaiti audiences the “high security” brought by the technology which is now awaiting final approval from the Central Bank of Kuwait.
Naturally, some Ripple enthusiasts were keen to latch onto the development – with one Reddit user providing running commentary in English on the ad itself, no doubt now convinced that a return trip to the moon in a lambo is nothing more than a few days off. “They’re not using XRP though,” one other Reddit user pointed out, emphasising that the Kuwait Finance House development is a purely technical one.
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 favourable interpretations within Sharia Law as a prerequisite for wider adoption.
The Kuwaiti development has emerged on the same day that Saudi authorities themselves confirmed that they consider both cryptocurrencies and cryptocurrency trading platforms illegal, 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 recognition of its kind for a cryptocurrency in the region.