Saudi Arabia’s relationship with cryptocurrencies has historically been cautious. The Saudi Central Bank (SAMA) and the Capital Market Authority (CMA) have been the primary regulatory bodies overseeing digital assets in the Kingdom. Initially hesitant, the government has been gradually warming up to blockchain technology while maintaining strict oversight.
The appointment of Mohsen AlZahrani as SAMA’s Virtual Assets and CBDC lead in July 2024 signals a potential shift. Al Zahrani, a fintech Veteran with nearly two decades at SAMA, previously led the SADAD payments system, SAMA’s Innovation Center, and blockchain projects, including the UAE-Saudi Project Aber for Cross-border CBDC payments. His role suggests Saudi Arabia is exploring a regulated framework for virtual assets, potentially including cryptocurrencies. Sources indicate that SAMA and the Capital Market Authority (CMA) are engaging with global crypto firms to draft formal regulations, spurred by the UAE’s success as a crypto hub under the Virtual Assets Regulatory Authority (VARA).
Further supporting this shift, Saudi Arabia has previously embraced blockchain technology. Since 2019, initiatives such as Project Aber and partnerships with Ripple and IBM have helped advance blockchain use in banking and trade. A 2024 fatwa by a prominent Saudi cleric declared Bitcoin Sharia-compliant, addressing concerns about its permissibility under Islamic law and boosting investor confidence. These developments are fueling the speculation that Saudi Arabia is moving towards a balanced, regulated approach to cryptocurrencies, inspired by regional peers like the UAE and Bahrain.
The Future
The trajectory suggests Saudi Arabia will continue its measured approach, gradually opening to cryptocurrency innovation while maintaining strict oversight. This aligns with the broader Vision 2030 goals of economic diversification and technological advancements, while ensuring the stability of the financial system.
The Kingdom’s approach represents a distinctive model in the global cryptocurrency landscape, striking a balance between innovation and maintaining strict regulatory oversight, without fully endorsing unrestricted adoption or enforcing blanket prohibitions.
