The Saudi Central Bank (SAMA), which also acts as the kingdom’s national banking regulator, recently appointed Mohsen AlZahrani to lead its virtual assets and central bank digital currency program. This hire potentially indicates a change in the country’s approach to cryptocurrencies, which regulators there have tended to treat with suspicion.

In 2018, SAMA warned against trading in virtual currencies because of their “negative consequences and [the] high risks on the traders as they are out of government supervision.” The central bank emphasized that cryptocurrencies, including bitcoin, “are not approved as official currencies in the kingdom and no parties or individuals are licensed for such practices by regulators in the kingdom.” The regulators further noted that Saudi citizens should not pursue the “illusion” of crypto-related “get-rich schemes.”

According to Mirza Mahmood ul Hasan, managing director of Fiduciam Global, a Riyadh-based consultancy firm that advises on digital transformation, the regulators have previously demonstrated an overly cautious attitude toward crypto. “Anything related to public investing or the flow of money, they will approach very, very conservatively,” Hasan told Al-Monitor. “They feel that they are the ones that will protect the public, and the feeling is often that the “common man” in Saudi may not be able to exercise a lot of judgment on his own.”

SAMA’s positioning on cryptocurrencies may also have been influenced by religious considerations. Digital assets have been controversial in the Muslim world. Because of the high degrees of volatility involved in crypto markets, some Islamic scholars have argued that trading crypto is effectively the same as gambling and is therefore haram. In 2017, prominent Saudi cleric Assim al-Hakeem declared that cryptos are prohibited under Islamic law because of their “ambiguity.” Last year, crypto was deemed haram in the world’s biggest Islamic country, Indonesia.