Kuwait CBDC Tracker

Kuwait is in the research phase. Central Bank of Kuwait governor Basel A Al-Haroon said, “The [Central Bank of Kuwait] is closely following the experiences of other countries that are issuing CBDCs, as well as the debates taking place among stakeholders in various countries regarding the various pros and cons.”

CBDC History and Development

In 2018, Central Bank of Kuwait governor Mohammad Y. Al-Hashel briefly commented on the possibility of there being a CBDC in Kuwait. He said, “In case the Central Bank of Kuwait decides to issue digital currency in the future, we will have the tools ready to go live. In addition to e-wallets, this includes a Digital Kuwaiti Dinar, which will facilitate exchange against tokenised assets.”

In 2023, Central Bank of Kuwait governor Basel A Al-Haroon said, “The [Central Bank of Kuwait] is closely following the experiences of other countries that are issuing CBDCs, as well as the debates taking place among stakeholders in various countries regarding the various pros and cons. Accordingly, it has formed a team of experts from various fields within the [Central Bank of Kuwait] to study the topic. Any such issuance would need to be accomplished in a way that preserves monetary and financial stability, while maintaining confidence in Kuwait’s payment system.”

Human Rights and Civil Liberties Concerns

Kuwait earned a 37 out of 100 in Freedom House’s 2023 Freedom in the World report. As Freedom House noted in the report, control, surveillance, and corruption have been issues for Kuwait. The issuance or adoption of a CBDC in Kuwait could worsen these issues.

“Kuwaiti law assigns penalties for the publication of material that insults Islam, criticizes the emir, discloses information considered secret or private, or calls for the regime’s overthrow,” reported Freedom House. “Journalists also risk imprisonment under the restrictive 2016 Cyber Crimes Law, which criminalizes the dissemination of similar content online.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

Freedom House has also reported that “The media regulator, the Commission for Mass Communications and Information Technology, has sweeping powers to monitor, block, and censor online material.” Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default.

“Corruption is pervasive,” according to Freedom House. The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

In the meantime, for additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.