The Saudi Arabian Monetary Authority (SAMA) used blockchain technology to deposit part of the liquidity that SAMA had previously announced to be injected into the banking sector “as part of SAMA’s actions aimed at enhancing the sector’s capabilities to continue its role in providing credit facilities,” the organization announced.
The action “comes as a part of SAMA’s continues efforts in exploring and experimenting emerging technologies and keeping lead pace with the global trends of central banks in assessing the impacts of such technologies on the financial sector,” according to SAMA.
The Saudi Arabian Monetary Agency.
SAMA has been experimenting with blockchain technology for money transfers and other uses for some time, and the recent move to use blockchain to deposit money into the banking sector “was one of the key innovative initiatives launched by SAMA in its program to enable and develop Fintech in the Kingdom.”
Blockchain was first introduced in 2008, but only in the last half decade has the technology grown in popularity – and not just for financial transactions. Saudi Arabia has taken a global leadership role in the employment of the technology at the government level.
“Over the past five years something extraordinary has happened in blockchain: countries usually known for following tech innovation have taken leadership roles. Instead of normal stalwarts like the U.S. at the helm, many Middle Eastern countries are leading the way. What do they have in common? Friendly regulation,” Michael O’Loughlin writes in Forbes.
“This move acts as part of SAMA’s active role in providing much-needed credit facilities. SAMA is a prime example of an innovative regulator willing to experiment with new emerging technologies,” he said.
“By assessing the multiple use cases and benefits of blockchain, SAMA ensures the Kingdom keeps apace with global market trends. While fintech is on the rise across the region, this new money transfer via blockchain by the central bank will no doubt shine the much-deserved spotlight on fintech in Saudi Arabia. The rapidly growing Saudi fintech community have been given several boost over the past 12 months, including the SAMA Regulatory Sandbox, new digital banking services and blockchain education programs.”
