Bitcoin had recently become a huge craze across the world, with its value going through the roof before crashing back to more normal levels in recent times.

While the virtual currency was slowly becoming more popular in the country, the Qatar Central Bank (QCB) has moved to curb its usage.

In a statement sent to all banking institutions operating in the country, the Qatar Central Bank has made it illegal to deal in Bitcoins, reported The Peninsula.

The circular also warned of penalties being levied from people who violates the rule.

The QCB said that active trading in Bitcoin has been noticed in some countries. However, it is an illegal currency as there is no commitment from any central bank or government in the world to exchange the currency’s value for money nor is it cleared for payment for the goods traded globally, or for gold, it said, according to Qatar Tribune.

“This cryptocurrency is highly volatile and can be used for financial crimes and electronic hacking and risks loss of value because there’re no guarantors or assets,” the QCB added.

The central bank explained that in order to ensure the safety of the financial and banking system, all banks operating in the country are not allowed to deal in any way with this currency or exchange it with any other, or open accounts to deal with it or send or receive any money transfers for the purpose of buying or selling this currency.

Recently, banks in Britain and the USA had banned the use of credit cards to buy Bitcoin and other cryptocurrencies, fearing a plunge in their value will leave customers unable to repay their debts.