The Kingdom of Saudi Arabia is planning to launch its own state cryptocurrency in 2019, as stated by Mohsen Al Zahrani, Director of Innovation (SPARC) at the Saudi monetary authority (SAMA), the country’s financial control body.
This statement follows that of Mubarak Rashed al-Mansouri, Governor of the UAE Central Bank, who said that a state cryptocurrency is already under development.
The objective of the new currency is not so much the retail sector but the interbank payment service, also at an international level.
The Saudi government wants to be the most technologically advanced but is proceeding with caution because it wants to avoid dangers related to the financial system and consumers.
The new state cryptocurrency will be fully consistent with national and international financial regulations and will serve as a means of exchange (MoE) for access to the stock exchange and financial services.
With this system, international payments will be faster and will also be disconnected from the SWIFT system, which, as demonstrated by the recent reintroduction of sanctions against Iran, is politically influential.
This happens, however, in a very particular environment where ordinary, decentralized cryptocurrencies have been officially banned since last August, with a decree that outlawed them under the pretext of investor protection and following the birth of several websites that presented themselves as “authorized”.
In the meantime, both Dubai and the UAE are positioning themselves as hubs for the development of the blockchain, with the objective of shifting 50% of financial transactions to the DLT by 2021. ADAB Solutions is also about to launch an exchange compliant with the rules of Islamic finance.