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Fintech Market Overview

This article does not constitute legal advice.

Cryptocurrencies in Saudi Arabia

Fintech Software

With respect to cryptocurrencies, despite its warning about transacting with the cryptocurrencies that are in existence today, SAMA with the United Arab Emirates' (UAE) Central Bank has introduced a new cryptocurrency: Aber. Aber will allow blockchain cross-border transfers and payments between Saudi and the UAE in its efforts to explore, experiment and gain a deeper understanding of cryptocurrencies and distributed ledger technology. The introduction of Aber will also allow Saudi to benchmark findings against those of central banks to ensure that SAMA-issued cryptocurrencies overcome any issue facing other products. Moreover, the Saudi Central Bank has contracted with US-based Ripple to introduce pilot programmes for Saudi banks. This programme attempts to radically shift the banking system in Saudi Arabia by allowing transactions in digital currencies. At the Financial Sector Conference in April 2019, SABB stated that it will launch its Ripple-based cross-border payments through blockchain. Accordingly, Saudi Arabia's efforts to introduce its own digital currencies are evident through its contracts with the UAE's Central Bank and US-based Ripple.1

There are no legal standards governing blockchain and cryptocurrencies so far. Therefore, the laws are unclear with regard to the qualification of tokens as securities. We do believe that money laundering rules and tax laws will be applied to new technology in a similar way to conventional financial transactions.2

Smart contracts in Saudi Arabia

Fintech in Saudi Arabia

Fintech in other countries

Notes
  1. http://www.sabb.com/en/about-sabb/news-room/News-Year-2019/SABB-Launches-New-Ripple-Based-Cross-Border-Instant-Payments/
  2. https://thelawreviews.co.uk/title/the-financial-technology-law-review/saudi-arabia
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