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Binance Expects Saudi Crypto Regulation To boost Industry growth In 2024

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Saudi Arabia is one of the most important markets for cryptocurrency and Binance, the world’s largest crypto exchange, is eagerly awaiting the possible introduction of “high-level” regulation for digital currencies in the country this year. Bandar AlTunisi, Head of Development at Binance in Saudi Arabia, said that the crypto industry has been growing steadily in the region over the past seven years.

According to US blockchain analysis firm Chainalysis, crypto transactions in the Middle East increased by 12% year-on-year to reach $31 billion in July 2023. AlTunisi expressed his hope that the Saudi authorities will soon announce their regulatory framework for crypto, which he said will be a “huge catalyst for growth in the industry”.

It could be tomorrow, it could be in a month’s time, [but] once they’re ready, they will move quickly, which is what excites us about the Saudi market. I am hopeful about this year, but [it] is dependent on a lot of different factors, he said.

Bader Al Kalooti, Head of Binance Middle East, Africa and Southern Asia (MEASA) and Turkey, said that Binance is ready to comply with any regulations that the Saudi government will impose, as it has done in other jurisdictions.

According to AlTunisi, it is still very early. In relative terms, this industry is nascent. Typically, disruptive technology rolls out first, and then it takes a while to demonstrate a product-market fit—showing that people want this technology—before regulations catch up.

Binance’s Role In Saudi Cryptocurrency Regulation

Several Saudi government bodies are involved in studying the potential regulation of crypto, including the Saudi Central Bank (SAMA), the Ministry of Communications and Information Technology (MCIT), which will oversee the blockchain aspect, and the Capital Markets Authority (CMA).

In 2018, Saudi Arabia launched the Financial Sector Development Programme, which aims to diversify the economy and develop the financial sector. The programme could also include the regulation of cryptocurrency, as part of the vision to make Saudi Arabia a leading global financial hub. AlTunisi said that once the regulation is announced, there will be a period of learning and adaptation for both the regulators and the industry players.

AlTunisi said that Saudi Arabia is a priority market for both crypto in general and Binance in particular, as it has a large and tech-savvy population, a high demand for digital assets, and a supportive government. He also said that Binance has a strong presence and reputation in the country, as it is the only major exchange that has a dedicated team and office in Saudi Arabia.

There is no other major exchange that has boots on the ground in Saudi in the way Binance does, […] Saudi is one of those places [where] once they move, they move big/. We really anticipate that there is going to be movement soon, and once they do, it is going to be a huge catalyst for growth in the industry, said AlTunisi.

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Saudi Aramco Backed Wahed Acquires UK Based Niyah to Boost Digital Asset Ecosystem

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The world of fintech has seen a massive uptick over the past few weeks with several organizations making it a point to launch new products. Most developments in the sector were skewed towards bringing in more users into the industry with the sole aim of increasing mass adoption.

The industry received another boost recently when the United States-based Wahed Incorporated acquired Niyah Limited, a digital banking application catering towards the Muslim community. Wahed’s Saudi Aramco connection also makes it one of the major players in the Asian fintech market.

Wahed officials claimed that the acquisition will pave the way for more offerings that would allow Islamic law compliant financial services to grow and thrive.Niyah’s services became popular in the United Kingdom for its easy to use features that worked hand-in-hand with the Sharia Law. As of now, the financial terms of the deal were kept under wraps with the numbers only being discussed between Niyah and Wahed.

Wahed added that the main intention of the deal was to provide its customer base with interest-free financial products such as debit cards and digital bank accounts. The latest movement comes on the back of a $25 million investment into Wahed by Saudi Aramco Entrepreneurship Ventures. Post the announcement, Wahed chief executive Junaid Wahedna said:

“All the money you keep with us will be invested according to your preference. There is no reason why we should not broaden out the scope of our reach to everyone.”

Wahed’s 100,000 strong customer base was excited for new features to be added onto the platform. What makes Wahed stand out is its adherence to the Muslim Shariah Law which prohibits charging the users base with interest. According to reports from within the company, Wahed will allow customers to keep a certain amount of funds on themselves. This was done so that the cash deposits are not used for lending but rather to earn interest. The company added that once the current developments take hold, there are plans to diversify into other communities as well.

Saudi Arabia and UAE Join Hands to Conduct CBDC Experiment; Participants Include Six Major Banks

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Cryptocurrency developments across the world have captured the attention of several major institutions, with some governments taking the extra steps to adopt virtual currencies. This rapid growth was personified recently when Saudi Arabia and the United Arab Emirates announced a joint central banked digital currency [CBDC] experiment between the two countries.

On Monday, the two countries revealed details about Project Aber which was kick-started in 2018. During the transfer, both parties used a single CBDC issued by the central banks instead of separate currencies that need to be converted.

One of the major reasons why the single CBDC transfer worked is that both the UAE Dirham and the Saudi Riyal are pegged to the United States dollar, creating a common backing. The main idea behind the experiment was to show the rest of the world that the decentralized economy was fast approaching. The experiment used synthetic transactions instead of real money, a transition that is set to be in the pipeline.

According to reports, the difference in monetary policies also features as part of the discussion between Saudi and the UAE. Sources added that future projects include an instant settlement for capital market transactions, use of multiple currencies as well as delivery versus payment. A major advantage of the currency single CBDC setup was that it removed the need for Nostro accounts to be maintained by a separate commercial bank.

The two central banks were not the only participants of the experiment as they were joined by six other commercial institutions. The banks of Riyad, Al Rajhi, and Al Inma in Saudi and Dubai Islamic, First Abu Dhabi, and ENBD in the UAE were the banks that also tested their virtual assets mettle. The aforementioned banks were also brought in to discuss future plans of issuing a CBDC for a specific transfer and then redeeming it at the end.

Security was also discussed during the experiment as it was one of the most important characteristics to bring customers in. All the participants unanimously agreed that transactions need to be resilient no matter what the situation with the transmitter and receiver. If all goes well and good, experiments in the future would include more participants and a much larger transaction ecosystem.

Saudi Arabia Steps Up Fintech Game as Western Union Acquires STC Pay

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New technologies have recently taken the market by storm, with organizations realizing that it’s a simple matter of sinking or swimming. The decentralized economy was one of those fields where innovation and adoption going hand-in-hand.

Just recently, the rising popularity of the fintech industry was put on display when traditional money transferring firm Western Union acquired a 15 percent stake in Saudi Arabian STC Group. The buy-out was calculated to be around $200 million with WU planning to use fintech to expand globally. 

The involvement of traditional organizations in the fintech world was the first step in creating awareness among large banked populations. For holders of large accounts who are usually older and lack the knowledge in fintech, the Western Union acquisition opens doors to new avenues. According to STC Group chairman Mohammed bin Khalid Abdullah Al Faisal, the country aims to fulfill its destiny as a digital enabler.

STC further claimed that its fintech wing-stc pay- was the first licensed fintech company by the Saudi Arabian Monetary Authority. With more than 4.5 million users, WU will be receiving a large chunk of people dealing with the new technology. The creation of awareness will be the most important step in onboarding new users into the field.

Post the acquisition, STC pay was valued at $1.3 billion, making it the first Saudi Arabian fintech unicorn. Coincidentally, the first fintech unicorn is also the country’s first unicorn in the private industry space.

The acquisition process was started by STC back in October when the company wanted investors to look into its technology. Officials from the Saudi government added that the main intention of the deal was to reduce people’s dependency on cash while modernizing the economy of the country at the same time.

Countries like Saudi Arabia are on the verge of creating new opportunities because of the rapid changes brought in by the coronavirus. If STC pay can live up to its name in the middle east, then analysts expect a large fintech boom in the region soon.