Within the Gulf Cooperation Council (GCC), countries like Bahrain and the United Arab Emirates (UAE) have embraced crypto in their policies and regulations. Kuwait, however, continues to be more cautious about this developing technology than others, slowly placing more restrictive policies regarding crypto activities. In spite of these policies, Kuwaitis remain active crypto users, particularly among younger, tech-aware individuals, leading to a split between behaviours and policies. Read on as we explore this divide and look at what the future may hold for crypto in the country.
Kuwait’s Legal Stance on Crypto in 2025
As of 2025, Kuwait has a strong, prohibitive stance on crypto and related activities like payments, mining, investment, and trading. The ban was implemented through the Capital Markets Authority (CMA), which released a circular notifying Kuwaitis of the stance and emphasising the risks associated with digital assets like crypto.
Initially, Kuwait’s stance was not so strong or prohibitive; it just banned activities like making payments with crypto. However, a study by the country’s National Committee for Combating Money Laundering and Financing of Terrorism and growing government concern surrounding criminal activities associated with crypto led to the ban. As a result, banks, including Kuwait’s Central Bank, and financial service providers are prohibited from offering services relating to crypto.
But criminal activity hasn’t been the only concern for the government as crypto has grown in popularity. There have also been concerns relating to its volatility and how this may impact the financial well-being of citizens, as well as the high energy demand of crypto mining on the country’s electrical grid.
Public Use and Investor Behaviour
While illegal, crypto use and mining continue in the country. Kuwait has a young, tech-savvy population, and many are naturally drawn to the innovation and potential of crypto—despite the restrictions and challenges in accessing them. Kuwaiti crypto users are accessing crypto platforms like Binance and Bybit through VPNs and offshore wallets—a workaround also observed in activities like online gambling.
Through VPNs and offshore options, Kuwaitis can participate in crypto activities, such as peer-to-peer trading, investing, payments, and sending and receiving crypto internationally. These platforms have led to a very active crypto community projected to reach $58.1 million USD this year. The growth rate of these activities has also been high, even with the legal shifts in recent years. The Compound Annual Growth Rate (CAGR) of crypto in Kuwait is estimated to be 8.15%. Assuming it continues on this trajectory, the country’s crypto industry will be worth $62.9 million USD by 2026.
In May of 2021, crypto mining in the nation made headlines globally because of the country’s crackdown on the activity. Kuwait currently has a struggling electrical grid due to factors such as the country’s growing population and increasing environmental temperatures. Another contributing factor is crypto mining, which requires immense levels of energy, further straining Kuwait’s electrical grid and threatening blackouts that could impact essential services. The government set out on an operation to shut down crypto mining activities, targeting homes that were consuming significantly more energy than others. Following the operation, energy consumption in the Al-Wafrah region fell by 55%.
Casinos in Kuwait and the Parallel Demand for Digital Risk Platforms
The behaviour surrounding crypto use closely mirrors the use of online gambling platforms in Kuwait; both are subject to prohibitive laws, leading to people seeking offshore options. Both activities attract users for their risk and reward potential.
Gambling, whether land-based or online, is strictly prohibited in the country. Despite this, offshore online casinos in Kuwait, along with other gambling platforms, attract a significant number of players from the nation. Kuwaitis are accessing them in the same way they are accessing crypto platforms, using VPNs.
The online gambling market in Kuwait is growing at an 8.5% CAGR, and this rate is projected to continue into 2031. Though the country’s electrical grid is dated, its internet infrastructure is strong, with 5G widely available. Smartphones have also been widely adopted across the GCC, exceeding a 90% market penetration rate. In addition to smartphones, gaming gear has become a lucrative market in Kuwait, projected to reach $45 million USD this year. These factors enable desktop and mobile gaming activities for the young population drawn to the exciting allure of these platforms and the immersive, rewarding gameplay.
There have been calls to regulate both crypto and gambling; however, Kuwait has yet to make moves in this direction. As such, there are no regulations or licensing frameworks for Kuwaiti gamblers and crypto enthusiasts, adding another layer of financial and security risks to these activities. Even with these risks, individuals and businesses are wading into the crypto and gambling waters, not by engaging directly in crypto or gambling, but by exploring related technologies like blockchain. They’re seeing the potential innovations that these present for startups and fintech.
Startups, Fintech, and Blockchain Innovation
Although other nations in the GCC are embracing crypto and related technologies, Kuwait continues to keep it at arm’s length. But that doesn’t mean it’s opposed to innovations like blockchain for modernising public services and administrative systems. The interest in developing technologies like blockchain is widespread in the country, from the development of smart cities and a business-friendly environment to secure data handling.
In 2017, the government began work on the “Kuwait Vision 2035“ initiative. Through this, the country is working to enhance its economy to foster an international trade hub and a better quality of life for all of its citizens. Key action items in this initiative include diversifying productivity into non-oil industries to appeal to global investors and businesses, and providing new and updated infrastructure for a thriving business environment.
The concept of smart cities is playing a pivotal role in effectively reshaping and enhancing Kuwait’s current operations to achieve its 2035 vision. Smart cities rely on data collection and analysis, the Internet of Things (IoT), AI, and various technologies to create more efficient systems (like water management and transportation networks) and effective resource allocation. They also enhance the citizen experience. Because of the heavy data use, smart cities require robust security to protect data, and blockchains are proving to be an ideal solution for this. The country is actively integrating blockchain across smart cities like Saad Al-Abdullah and Al-Mutlaa.
Kuwait is even embracing these technologies for the fintech industry to help encourage and foster economic growth. It’s already shaping a thriving startup ecosystem, with sectors like fintech and edtech being among the most notable. Startups like Enabill, Btr.tech, and MyU are making waves for their innovative services and solutions across diverse industries.
Predictive Outlook: Where the Crypto Market Could Be Headed in Kuwait
Kuwait may currently ban crypto, but the potential it offers to citizens and businesses may lead the country’s policymakers to lighten their stance. For citizens, the sending and receiving of remittances could be streamlined through crypto holdings, allowing people to have more economic freedom and flexibility. This can have positive ripple effects on the entire country’s economy. Stablecoins can be a useful way to reduce volatility. As their performance and use in other countries are tracked and evaluated, it may prompt Kuwait to consider them.
While the country focuses its efforts on becoming more business-friendly, embracing crypto could help shape a more inviting business environment. However, Kuwait’s cautious approach will likely see the country wait and assess the success of other GCC countries before implementing them. Until that happens, offshore crypto investors and traders will continue to be the norm for crypto enthusiasts in the country.
Kuwait’s crypto policies and crypto use are at odds, and this signals that something needs to change to address the divide. Keeping a careful watch on user behaviour and evolving policies in the years to come will paint a clearer picture of the future of crypto in Kuwait, determining whether it will embrace it or continue to lag behind other nations in the GCC region.
