According to a tweet by Bloomberg, Fahd Almubarak, the governor of Saudi Central Bank has expressed his doubt and said that it is unlikely for central banks’ digital currencies to replace fiat money or current payment systems. According to him, the digital currencies of the central bank will rather play an integrative role with different forms of traditional cash and other payment methods.
That being said, it is also clear that the blockchain and crypto space is no longer a dream. As the entire world is waiting for Saudi Arabia to make a move regarding the matter, the blockchain and crypto space is now much closer to becoming a reality.
As a matter of fact, Saudi Arabia’s banking regulator has recently assigned Mohsen AlZahrani to lead its virtual assets and central bank digital currency program in a sign of the potential crypto ambitions of the Gulf state.
In addition to that, the rise of the neighboring United Arab Emirates as a global crypto hub has created some sort of urgency in Riyadh to frame more formal rules for the asset class, leading the Kingdom to collaborate with the UAE on a possible joint digital currency for several years.
Saudi Arabian Prince Bandar Bin Abdullah Al Mishari, Assistant to the Saudi Minister of Interior for technology has similarly conveyed support for the implementation of Blockchain projects in the Kingdom, as well as the possibility of permitting the utilization of cryptocurrencies.
The Kingdom of Saudi Arabia has been exhorting innovation within the startup scene in the country. Recently, KSA’s Taqadum accelerator invested in a blockchain startup from Oman. In addition, companies such as USA Everything has disclosed that they will soon be opening up offices in the Kingdom. Earlier, Aramco financed blockchain-enabled Data Gumbo and opened its office in KSA.
Luckily, KSA residents are also beginning to show openness and acceptance towards cryptocurrencies, as 18% of residents are already trading in crypto. The kingdom is the largest economy in the Middle East, with a fairly affluent population. This makes it a key market for any corporation operating in the region. Some of the biggest players in this industry, including Binance Holdings Ltd., have staffed up their Saudi teams, as they have identified the potential of the kingdom and its large untapped market if it loses the current restrictions.
Earlier in 2018, Riyadh banned banks from processing transactions that involved cryptocurrencies, though workarounds existed to trade. Nonetheless, the steps that are being taken recently indicate that the Kingdom is now much more open to this technology, and is looking forward to putting it to use.