Saudi Arabia

Crypto Biz: Worldcoin expands, Saudi Aramco considers digital assets, and more

Traditional financial firms are increasingly connecting services, portfolios and operations with digital assets.

Traditional financial firms are increasingly connecting services, portfolios and operations with digital assets, taking advantage of the crypto winter to build and find a market fit for crypto-related solutions.

Recent examples include Deutsche Bank’s asset management arm, DWS, which announced a new venture with Galaxy Digital and Flow Traders to jointly issue a euro-denominated stablecoin. In another development, oil company Saudi Aramco signed an agreement with financial services firm SBI Holdings about a possible collaboration on digital assets and co-investment in SBI’s digital asset portfolios.

Meanwhile, in the United Kingdom, pension fund M&G has invested $20 million in the country’s first regulated Bitcoin (BTC) derivatives exchange, Global Futures & Options Holdings.

Japan’s SBI looks to Saudi Aramco to continue Middle East expansion

They have signed a memorandum of understanding on digital asset investment and semiconductor production.

Japanese financial services firm SBI Holdings and Saudi Arabian state-owned oil company Saudi Aramco are considering teaming up on digital asset investment and semiconductor production projects. The two signed a memorandum of understanding (MoU) on cooperation that includes establishing SBI Middle East in Riyadh as a base for regional operations.

According to the MoU, signed Dec. 7, SBI and Saudi Aramco will consider collaborating on digital assets and co-investing in their digital asset portfolios. They may identify Japanese digital asset startups that could be interested in expanding to Saudi Arabia and launch semiconductor production projects in both countries. In addition:

Saudi Aramco is the world’s second-largest corporation by revenue, after Walmart. The MoU mentioned Saudi Aramco investments aimed at complementing its supply chain. Cryptocurrency is “not recognized by legal entities” in Saudi Arabia, although the government has shown a healthy interest in Web3. SBI Holdings’ partnership with Taiwan-based Powerchip Semiconductor Manufacturing was also highlighted.

Japan’s SBI looks to Saudi Aramco as it continues Middle East expansion

They have signed a memorandum of understanding on digital asset investment and semiconductor production.

Japanese financial services firm SBI Holdings and Saudi Arabian state-owned oil company Saudi Aramco are considering teaming up on digital asset investment and semiconductor production projects. The two signed a memorandum of understanding (MoU) on cooperation that includes the establishment of SBI Middle East in Riyadh as a base for operations in the region.

According to the MoU, signed Dec. 7, SBI and Saudi Aramco will consider collaborating in the field of digital assets and co-investing in their digital asset portfolios. They may identify Japanese digital asset startups that could be interested in expanding to Saudi Arabia and launch semiconductor production projects in both countries. In addition:

Saudi Arabia partners with The Sandbox for future metaverse plans

In a partnership ceremony at the Leap 2023 conference in Saudi Arabia, The Sandbox entered into an MOU with the government of Saudi Arabia for future metaverse development.

Initiatives toward metaverse development continue to be a significant focus and key interest in the Middle East, as the Leap conference in Riyadh, Saudi Arabia highlights key topics in the industry.

On Feb. 7, a partnership ceremony was held at the conference, which acknowledged a new memorandum of understanding (MOU) between The Sandbox and the government of Saudi Arabia.

According to social media posts from Sebastien Borget, the co-founder and chief operating officer of The Sandbox, the MOU is with the Saudi Arabia Digital Government Authority (DGA) for the purpose of “exploring, advising and supporting” one another in metaverse development.

It was a true honor to sign our MOU partnership ceremony between @TheSandboxGame and the Saudi Arabia Digital Government Authority (DGA) during #LEAP 2023 conference, and we look forward to exploring, advising and supporting mutually each other in activations of the Metaverse pic.twitter.com/mTBYqlwvUa

— Sebastien (@borgetsebastien) February 7, 2023

While there are no further updates about the extent of the partnership, both parties have been actively pushing the boundaries of the Web3 space relative to their areas of expertise.

The Sandbox has partnered with some of the biggest names both inside and outside of the Web3 space, including Snoop Dogg, Gucci, Tim, Atari, HSBC and Warner Music Group, among others.

The Saudi-based conference comes as the Middle East continues to establish the region as a hub for emerging technologies. Last November, Abu Dhabi in the United Arab Emirates was chosen as the location for the newly formed Middle East, Asia and Africa blockchain association.

Shortly before, the Dubai International Financial Centre instituted a crypto token regime to apply to all tokens recognized in the zone. The city has been a long-standing beacon of regional innovation when it comes to the Web3 space.

It opened the first nonfungible token store and, on Feb. 7, released its long-awaited regulations for virtual asset providers.

In a survey conducted by KuCoin last July, Saudi Arabia was revealed to be a significant market for digital currency adoption due to local regulations. The government is currently researching the possibilities for a central bank digital currency.

Saudi Central Bank still researching CBDC, but no decision on deployment

Saudi Arabia’s central bank stressed that no decision has been made to launch a CBDC, but it will continue to research use cases.

The Saudi Central Bank (SAMA) is ramping up its research into central bank digital currencies (CBDCs) but is yet to announce a deployment.

In a Jan. 23 bulletin, the bank stated it was working on a phase of a project that “focuses on domestic wholesale CBDC use cases in collaboration with local banks and fintechs.”

However, it confirmed there had been no final decision to launch such a digital currency in the Middle Eastern nation.

“SAMA stresses that although no decision has been made regarding the introduction of CBDC in the Kingdom, it continues to focus on exploring the benefits and potential risks of implementing CBDC.”

SAMA is researching several aspects of a state-issued digital currency including economic impact, market readiness and the applications of a CBDC-based payment solution. It also intends to review policy, legal and regulatory considerations.

The move is part of Saudi Vision 2030, an initiative to reduce the kingdom’s dependence on oil, diversify its economy and develop public service sectors such as health, education, infrastructure, recreation and tourism.

According to SAMA governor H.E. Fahad Almubarak, local banks and payment companies will be heavily involved in the CBDC project and implementation.

*SAMA Governor H.E. Fahad Almubarak. Source: SAMA*

SAMA successfully conducted a CBDC experiment called “Project Aber” in 2019. It worked in collaboration with the Central Bank of the United Arab Emirates to examine whether blockchain technology could contribute to cross-border payments.

The banks released a report on their findings in late 2020 concluding a dual-issued CBDC was technically viable for cross-border payments and presented “significant improvement over centralized payment systems in terms of architectural resilience.”

No details were provided on the technology behind the Saudi CBDC, but CBDC Tracker suggests it is based on the Linux Foundation’s Hyperledger Fabric.

According to the United States think tank Atlantic Council, there are currently 11 countries that have fully deployed a CBDC and 17 are running pilots. Most of those that have launched are in the Caribbean, with one in Nigeria.

Prince Philip of Serbia calms rumors of Arab country Bitcoin adoption

In an interview with Cointelegraph, the hereditary prince nuanced his views on Bitcoin adoption in the Middle East and shed light on Bitcoin in Serbia.

Prince Filip Karađorđević, known as Philip Karageorgevitch in English, placated rumors that an Arab country would “soon” adopt Bitcoin (BTC) as legal tender. In an interview Philip delivered from Serbia, the prince explained that Bitcoin adoption is an inevitability for all countries.

As a result of the thesis he first shared on a Bitcoin Reserves podcast, some news outlets jumped at the comments. Headlines that an Arab country would soon adopt Bitcoin quickly disseminated. However, as a Bitcoin advocate, Philip expounded that Bitcoin adoption is, in fact, inevitable for all countries and not just Arab states:

“It’s definitely going to happen. But I don’t know which country or who is going to do it where or anything like that, but it’s bound to happen. Every country will eventually adopt Bitcoin.”

The Prince shared that Bitcoin is an excellent fit for Muslim countries because “it makes perfect Sharia money.” Islamic law, known as Sharia, is based on Quran teachings and dictates whether something is permissible (halal) or illegal (haram). In the case of money, Philp would argue that Bitcoin is, in fact, halal and a perfect form of Islamic finance:

“It’s only a matter of time before a Muslim country that follows Sharia law would have to adopt it. Some people grab that and make it as a selling item, saying that of course, if a prince knows it, that some Arab or Muslim country is going to adopt Bitcoin soon, then it’s going to happen.”

Prince Philip is technically the prince of Serbia and Yugoslavia because when the monarchy was abolished, Serbia as a country had not been created. “But today, obviously, Yugoslavia doesn’t exist. And since we are Serbian origin, then it’s of Serbia,” Philip clarified. Nowadays, Serbia is a parliamentary republic, although some Serbs support the creation of a parliamentary monarchy, similar to the United Kingdom.

Philip burst onto the Bitcoin scene in March this year when he appeared on a chat show. He explained the difference between Bitcoin and crypto, adding that “Bitcoin is freedom, and this is something that I want for everyone.”

Philip told Cointelegraph that the three-minute video changed his life. He was a guest at the Bitcoin Miami 2022 conference and even played a role in the president of Madeira’s journey into Bitcoin.

Regarding Bitcoin adoption in Serbia, sadly, the prince cannot wave a royal wand and create a Serbian-style El Salvador in Europe. Nonetheless, there are certain benefits to Serbia adopting Bitcoin, the prince notes:

“There’s a lot of Serbs around the world. It’s a huge diaspora. I think the biggest concentration or the biggest diaspora is in Canada, then Chicago.”

The remittance use case for the approximately 5 million Serbs living outside of Serbia who regularly send money to their home country is convincing. Given that Bitcoin transcends borders, offering people a way to instantly send value across the world without a middleman, it could bolster Serbia’s economy. For El Salvador, in the first year of adopting Bitcoin, remittances into the country exceeded $50 million.

Furthermore, Serbia neighbors the Free Republic of Liberland. A micronation nestled upon a thin stretch of land on the Danube river, Liberland adopted Bitcoin as currency over seven years ago. There is evidence of grassroots Bitcoin advocacy in the Balkans.

Plus, one of the world’s most decorated tennis players, Novak Djokovic is a Serb. He’s also a freedom-lover and has staunch anti-state views. In the prince’s eyes, he’s an “obvious orange pill that needs to happen, 100%.”

Survey reveals high penetration and adoption of crypto in Saudi Arabia

Saudi Arabia is a significant market for digital currencies with the country’s favorable regulatory climate, large consumer base and increasing interest in cryptocurrencies, a new KuCoin survey says.

The high degree of penetration and adoption of crypto in Saudi Arabia makes it an important market for digital currencies, demonstrating the potential for expansion in the Middle East and North (MENA) region.

According to a survey conducted by crypto exchange KuCoin, around 3 million Saudi Arabians (or 14% of the adult population aged 18 to 60) have become crypto investors who, as of May 2022, either currently own cryptocurrencies or have traded in the past six months.

Another 17% of respondents are labeled crypto-curious and are likely to invest in cryptocurrencies in the next six months. As per the study’s findings, there is a long-term interest among potential crypto investors in the Arab nation. In the first quarter of 2022, 49% of crypto investors intended to increase their investment in cryptocurrencies over the next six months.

In the second quarter of 2022, investor sentiment shifted toward more conservative cryptocurrency investment techniques as the bearish market began. Thirty-one percent of crypto owners in Saudi Arabia said they would keep their crypto balance as is rather than expand it. During the same period, investors with lower incomes sold off a portion of their holdings, per the survey.

In Saudi Arabia, the high number of new market entrants is unprecedented, with 76% of crypto investors having less than one year of expertise in the sector, including 49% who first began trading cryptocurrencies in the previous six months.

Per the report, in terms of demographics, 63% of crypto investors are men. The gender ratio has remained consistent throughout the years. Young crypto investors under the age of 30 account for at least a third of the entire population and have risen to 37% in Q2 2022.

Half of the crypto investors purchase digital currencies using fiat and engage in spot trading on a monthly basis, which is the only form of crypto trading that some Arab theologians consider halal. As reported by Cointelegraph, the Saudi Arabian Oil Company (Saudi Aramco) fueled excitement among cryptocurrency followers last year after investing $5 million in blockchain-based oil trading firm Vakt. While this initiative sought to digitize and automate post-trade processing, it was also reported that Saudi Aramco would begin Bitcoin (BTC) mining operations.

While the Kingdom of Saudi Arabia has not yet released any official regulations surrounding cryptocurrencies, the government appears to have taken a supportive stance toward digital assets and blockchain technology.

In 2019, the Saudi Arabian Monetary Authority (SAMA) and United Arab Emirates Central Bank (UAECB) jointly announced a digital currency called Aber. The cryptocurrency will be used for cross-border payments between the two countries and is backed by their respective fiat currencies.