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Retail_Trading_Status

Banned Unknown
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Analysis ID
#221
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Archived
Created
2025-04-13 07:59
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Executive Summary

Retail cryptocurrency trading in Jordan is banned due to the Central Bank of Jordan's (CBJ) prohibition on financial institutions facilitating crypto transactions. The CBJ cites risks such as volatility and potential for financial crimes and has issued warnings against investing in cryptocurrencies. The Jordan Securities Commission (JSC) is developing a regulatory framework for virtual assets, including licensing for VASPs, with a planned completion by January 2026; however, the current ban remains in effect, pushing crypto activity to unregulated channels.

Key Pillars

The primary regulator is the Central Bank of Jordan (CBJ), which has prohibited financial institutions from facilitating cryptocurrency transactions. Core compliance requirements include Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). Licensing or registration requirements for Virtual Asset Service Providers (VASPs) are being developed by the Jordan Securities Commission (JSC) as part of a future regulatory framework, which is planned to be completed within one year from January 2025.

Landmark Laws

  • CBJ Circular (February 2014): Prohibits all banks, currency exchange companies, financial entities, and payment service providers from facilitating any cryptocurrency transactions.
  • Jordanian Government Cabinet Decision (January 2025): Approved the establishment of a comprehensive regulatory framework for virtual and digital assets within one year.

Considerations

Cryptocurrencies are not legal tender in Jordan and are not backed by the government or central bank. The CBJ has warned against high volatility, hacking risks, and potential for financial crimes. Individuals are not explicitly prohibited from owning or trading cryptocurrencies; however, conducting transactions and exchanging fiat currency for digital assets can be difficult due to the limitations imposed on financial intermediaries. A regulatory framework for virtual assets is planned to be developed within one year from late January 2025, indicating a potential future shift.

Notes

The CBJ adopted a prohibitive stance towards cryptocurrencies early on, issuing a circular in February 2014. Despite the ban on formal channels, some Jordanians engage in cryptocurrency trading through foreign platforms or peer-to-peer methods. The Jordan Securities Commission (JSC) is developing a regulatory framework, planned for completion within one year from January 2025, signaling a potential future shift. However, the current prohibition remains in effect. CBJ circulars may require direct request or deeper search to locate specific details.

Detailed Explanation

The status of retail cryptocurrency trading in Jordan is Banned. The Central Bank of Jordan (CBJ) prohibits regulated financial institutions from facilitating cryptocurrency transactions and discourages citizens from engaging with crypto assets. Since February 2014, the CBJ has forbidden licensed entities under its supervision, including banks, currency exchange companies, financial firms, and payment service providers, from dealing in or facilitating transactions involving cryptocurrencies like Bitcoin. These prohibitions have been reiterated over the years, including in 2018 and subsequent warnings. The CBJ cites risks such as high volatility, the lack of underlying value or legal tender status, the potential for use in financial crimes like money laundering and terrorism financing, hacking risks associated with exchanges, and the absence of consumer protection mechanisms for investors.

While there isn't a law explicitly criminalizing the possession of cryptocurrency by individuals, the CBJ's ban on financial intermediaries effectively blocks legitimate channels for retail users to buy, sell, or trade cryptocurrencies using the formal Jordanian financial system, such as bank accounts and credit cards. This makes participation difficult, pushing activity outside the regulated sphere. Freeman Law notes that due to the CBJ's prohibition on financial institutions, "cryptocurrency trading is virtually prohibited under the laws of Jordan". The CBJ has repeatedly issued public warnings advising citizens against investing in or dealing with cryptocurrencies due to the associated risks, emphasizing that cryptocurrencies are not legal tender in Jordan and are not backed by any government or central bank.

Despite the ban on formal channels, some reports suggest that Jordanians still engage in cryptocurrency trading, often through foreign platforms or peer-to-peer methods. However, this occurs in a legally precarious environment, outside the protection of Jordanian regulations and against the explicit warnings of the central bank. In late January 2025, the Jordanian government approved an initiative to establish a comprehensive regulatory framework for virtual and digital assets within one year. The Jordan Securities Commission (JSC) has been tasked with developing this framework, including licensing requirements for Virtual Asset Service Providers (VASPs). The Chairman of the JSC, Adel Bino, confirmed in January 2025 that trading in virtual currencies is currently prohibited through bank accounts and licensed financial services companies, reiterating the CBJ's ban. The future framework aims to regulate trading for investment purposes initially, subject to transparency, disclosure, and AML/CFT requirements, but it is not yet operational.

Summary Points

Retail Cryptocurrency Trading Status in Jordan: Regulatory Analysis

I. Current Regulatory Status:

  • Banned: Retail cryptocurrency trading is effectively banned in Jordan.
    • This is based on the Central Bank of Jordan's (CBJ) prohibition on financial institutions facilitating cryptocurrency transactions.
    • While individual possession isn't explicitly criminalized, the ban on intermediaries severely restricts legitimate trading channels.

II. Key Regulatory Bodies and Roles:

  • Central Bank of Jordan (CBJ):
    • Primary regulator responsible for financial stability.
    • Has explicitly prohibited licensed financial institutions (banks, exchanges, payment providers) from dealing in cryptocurrencies since 2014.
    • Issues public warnings against cryptocurrency investment due to associated risks.
  • Jordan Securities Commission (JSC):
    • Tasked with developing a comprehensive regulatory framework for virtual and digital assets.
    • Will be responsible for licensing Virtual Asset Service Providers (VASPs) under the future framework.

III. Important Legislation and Regulations:

  • CBJ Circulars (2014, reiterated in 2018 and subsequent warnings):
    • Prohibit all banks, currency exchange companies, financial entities, and payment service providers from facilitating cryptocurrency transactions.
    • These circulars are the primary basis for the current ban.
  • Future Regulatory Framework (Initiative approved in January 2025):
    • The Jordanian government has approved an initiative to establish a comprehensive regulatory framework for virtual and digital assets within one year.
    • This framework is still under development and not yet operational.

IV. Requirements for Compliance (Under Future Framework - Not Yet in Effect):

  • The future framework is expected to include:
    • Licensing requirements for Virtual Asset Service Providers (VASPs).
    • Transparency and disclosure requirements.
    • Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) compliance.
    • Regulations for trading for investment purposes.

V. Notable Restrictions and Limitations:

  • Ban on Financial Institutions: Jordanian banks and other financial institutions are prohibited from processing cryptocurrency transactions.
  • No Legal Tender Status: Cryptocurrencies are not recognized as legal tender in Jordan.
  • Lack of Consumer Protection: No consumer protection mechanisms are in place for cryptocurrency investors under the current regulatory environment.
  • Limited Trading Channels: The ban on financial intermediaries makes it difficult to buy, sell, or trade cryptocurrencies through formal channels.

VI. Recent Developments and Changes:

  • January 2025: Regulatory Framework Initiative:
    • The Jordanian government approved an initiative to establish a comprehensive regulatory framework for virtual and digital assets.
    • The JSC is tasked with developing this framework, including licensing requirements for VASPs.
    • Important Note: The current prohibition remains in effect despite this initiative.
  • January 2025: JSC Chairman's Confirmation:
    • The Chairman of the JSC reiterated that trading in virtual currencies is currently prohibited through bank accounts and licensed financial services companies.

Full Analysis Report

Report on the Current Status of Retail Cryptocurrency Trading in Jordan

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Identified Status: Banned

2. Detailed Narrative Explanation:

The status of retail cryptocurrency trading in Jordan is best described as Banned. This determination is based on the explicit prohibition imposed by the Central Bank of Jordan (CBJ) on regulated financial institutions facilitating any cryptocurrency transactions, combined with strong official warnings discouraging citizens from engaging with these assets.

  • Historical Context and CBJ Stance: The CBJ adopted a prohibitive stance early on. In February 2014, it issued a circular explicitly forbidding all licensed entities under its supervision – including banks, currency exchange companies, financial firms, and payment service providers – from dealing in or facilitating transactions involving cryptocurrencies like Bitcoin. This ban has been reiterated over the years, including in 2018 and subsequent warnings. The CBJ cites significant risks, including high volatility, lack of underlying value or legal tender status, potential for use in financial crimes like money laundering and terrorism financing, hacking risks associated with exchanges, and the absence of consumer protection mechanisms for investors.
  • Impact on Retail Trading: While there may not be a specific law explicitly criminalizing the possession of cryptocurrency by individuals, the CBJ's ban on financial intermediaries effectively blocks legitimate channels for retail users to buy, sell, or trade cryptocurrencies using the formal Jordanian financial system (e.g., bank accounts, credit cards). This makes participation extremely difficult and pushes any activity outside the regulated sphere. Freeman Law notes that due to the CBJ's prohibition on financial institutions, "cryptocurrency trading is virtually prohibited under the laws of Jordan".
  • Official Warnings: The CBJ has repeatedly issued public warnings advising citizens against investing in or dealing with cryptocurrencies due to the associated risks. These warnings emphasize that cryptocurrencies are not legal tender in Jordan and are not backed by any government or central bank.
  • Recent Developments (Regulatory Framework Initiative): In late January 2025, the Jordanian government approved an initiative to establish a comprehensive regulatory framework for virtual and digital assets within one year. The Jordan Securities Commission (JSC) has been tasked with developing this framework, including licensing requirements for Virtual Asset Service Providers (VASPs). While this signals a potential future shift towards regulation, the current prohibition remains in effect. The Chairman of the JSC, Adel Bino, confirmed in January 2025 that trading in virtual currencies is currently prohibited through bank accounts and licensed financial services companies, reiterating the CBJ's ban. The future framework aims to regulate trading for investment purposes initially, subject to transparency, disclosure, and AML/CFT requirements, but it is not yet operational.
  • Practical Reality: Despite the ban on formal channels, some reports suggest that Jordanians still engage in cryptocurrency trading, often through foreign platforms or peer-to-peer methods. However, this occurs in a legally precarious environment, outside the protection of Jordanian regulations and against the explicit warnings of the central bank.

Therefore, considering the active prohibition on financial institutions facilitating crypto transactions and the strong official stance against retail participation, the status is classified as 'Banned'. The recent initiative to develop regulations indicates a potential future change but does not alter the current prohibitive environment.

3. Specific Relevant Text Excerpts:

  • Central Bank of Jordan (CBJ) Prohibition (via Freeman Law & Jordan News): "The Central Bank of Jordan (CBJ) enacted legislation that prohibits all banks, currency exchange companies, financial entities, and payment service providers from facilitating any cryptocurrency transactions, including Bitcoin. Consequently, cryptocurrency trading is virtually prohibited under the laws of Jordan." "the CBJ first sent out a circular prohibiting “all banks, financial institutions, exchange companies, and payment card companies” from dealing with cryptocurrencies under any possible circumstance in February of 2014."
  • CBJ Warnings (via Freeman Law): "In addition to the prohibition, the CBJ issued an official warning about the risks of cryptocurrency trading. First, the CBJ emphasized that cryptocurrencies do not qualify as legal tender in Jordan... Third, the CBJ warned that cryptocurrencies are highly volatile... Four, the CBJ warned that cryptocurrencies face high risks of hacking and other financial crimes... Finally, the CBJ warned that cryptocurrency offers no consumer protection measures."
  • Current Prohibition Confirmed Amidst New Regulatory Plans (via Jordan Times): (January 27, 2025) "[JSC Chairman Adel Bino] stressed that trading in virtual currencies today in Jordan is prohibited through bank accounts, and through financial services companies licensed by the JSC, stressing that the ban is from the Central Bank of Jordan."
  • Individual Activity vs. Institutional Ban (via CoinMarketCap & BitKan): "Although banks in the country are not permitted to deal with crypto, individuals are not criminalized for it, which has led to a strongly rising crypto market in Jordan." "Individuals are not explicitly prohibited from owning or trading cryptocurrencies. However, conducting transactions and exchanging fiat currency for digital assets can be cumbersome due to the limitations imposed on financial intermediaries."
  • Future Regulatory Framework Initiative (via Jordan Times & Jordanian Government Cabinet): (January 27, 2025) "Chairman of the Board of Commissioners of the Jordan Securities Commission (JSC) Adel Bino on Sunday said that the Cabinet's decision on regulating virtual and digital assets is a strategic choice for the state... the JSC is mandated to develop a regulatory legislative framework..." (January 27, 2025) "The Jordanian government Cabinet... has approved the establishment of a comprehensive regulatory framework for virtual and digital assets within one year."

4. Source Links:

  • Freeman Law (Analysis of Jordan's Crypto Laws): https://freemanlaw.com/jordan-cryptocurrency-laws/
  • Jordan Times (Report on JSC Chairman's statement & regulatory plans - Jan 2025): https://jordantimes.com/news/local/regulating-virtual-digital-assets-strategic-choice-state-%E2%80%94-jsc
  • LARA on the Block (Report on Government approval of regulatory framework - Jan 2025): https://laraontheblock.com/jordanian-government-approves-crypto-regulatory-framework/
  • Bitcoin.com News (Report on regulatory framework initiative - Jan 2025): https://news.bitcoin.com/jordan-to-create-comprehensive-digital-asset-regulatory-framework/
  • CoinMarketCap (Article discussing adoption despite ban - Feb 2022): https://coinmarketcap.com/alexandria/article/crypto-adoption-in-jordan-is-rising-despite-ban
  • BitKan.com (Analysis of Crypto-friendliness - Jan 2025): https://bitkan.com/learn/is-jordan-a-crypto-friendly-country-the-future-of-crypto-in-jordan-10930
  • Central Bank of Jordan (CBJ) Website (Circulars Section - Note: Specific 2014/2018 circulars might require direct request or deeper search): https://www.cbj.gov.jo/Pages/viewpage.aspx?pageID=140 (Link to general circulars page)
  • Central Bank of Jordan (CBJ) Website (Research/Publications - March 2020 Crypto Report): https://www.cbj.gov.jo/Pages/viewpage.aspx?pageID=1361 (Link to Research page, report titled "العملات المشفرة")
  • Jordan News (Article discussing CBJ ban and history - June 2021): https://www.jordannews.jo/Section-10/Features/Will-the-Central-Bank-of-Jordan-ever-embrace-cryptocurrency-1596
  • Wikipedia (Legality of Cryptocurrency by Country - Jordan Section): https://en.wikipedia.org/wiki/Legality_of_cryptocurrency_by_country_or_territory (Provides a summary referencing the CBJ ban).
  • Roya News (Report on CBJ Governor's statement on future licensing - Jan 2025, Arabic): https://royanews.tv/news/322807

Web Sources (15)

Sources discovered via web search grounding

Search queries used (6)
  • Central Bank of Jordan cryptocurrency retail trading status
  • Is cryptocurrency trading banned for individuals in Jordan?
  • Jordan cryptocurrency laws 2024
  • البنك المركزي الأردني العملات المشفرة الأفراد
  • Jordan Securities Commission crypto regulations
  • Jordan crypto ban details
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