Skip to main content

Is Saudi Arabia changing approach to cryptocurrencies?

Although Saudi Arabia seems to be warming to cryptocurrencies, it is unlikely to displace the UAE as the region’s crypto hub anytime soon.
Saudi staff are pictured where the Financial Sector Conference was held in Riyadh on April 24, 2019.

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.

Given all of this, what might have caused SAMA to consider a change in approach?

There is firstly the reality on the ground. Despite there being no legal means of buying crypto in Saudi Arabia, there has nonetheless been a proliferation in the number of citizens trading digital assets in the kingdom. According to research published in May by KuCoin, a global crypto exchange, around 3 million Saudis “have become crypto investors who either currently own cryptocurrencies or have traded over the past six months.” This accounts for 14% of the adult population aged between 18 and 60. KuCoin also claimed that a further 17% of adults are “crypto-curious and are likely to invest in cryptocurrencies over the coming six months.”

Hasan believes this may have prompted a recognition from the regulators that “it’s very difficult to stay away from this.”

“You cannot control this financial evolution. It will evolve everywhere in the world,” he argued. This is perhaps especially true in Saudi Arabia, where 70% of the population is under 30 and where attitudes on a wide range of subjects are liberalizing. The job of AlZahrani at SAMA is likely to involve considering regulations that will protect consumers — and offer the authorities at least some control over crypto markets — while accepting that innovation in this space will continue to take place.

Furthermore, there has long been interest from both public and private enterprises in Saudi Arabia in the potential of blockchain. This is the technology that underpins crypto, a public and transparent database that records transactions between different entities. While there is a strong association between blockchain and cryptocurrencies, the technology can also be used in non-crypto contexts.

Indeed, this type of use has increased significantly in the kingdom. For example, blockchain solutions have helped halal companies trace the source of ingredients and ensure the relevant standards are met. Major corporations like Aramco have also invested in developing the technology. Aramco has adopted blockchain as a way “to integrate thousands of sensors at oil fields and refineries to check performance.”

Because of the increasing number of use-cases, Hasan says that “there is a massive amount of interest in blockchain,” and this in turn is driving wider interest in crypto. He told Al-Monitor that SAMA may believe that “you have to use a cryptocurrency” in order to take full advantage of "fintech and blockchain solutions.”

Some observers have also noted that the kingdom’s shift may be influenced by the success of the neighboring United Arab Emirates. The UAE has offered a favorable regulatory environment for digital assets companies and granted licenses for many of the global exchanges to operate in the emirates. This has seen both Dubai and Abu Dhabi emerge as global crypto hubs.

Abdulla Al Ameri, a crypto specialist who founded a blockchain-focused venture capital fund in the UAE, believes that Saudi Arabia has been inspired by his country’s success. He said that the “UAE is showing Saudi [Arabia] how to bring investment in,” and this has prompted SAMA to consider “regulating the crypto markets.”

While some have described Saudi Arabia and the UAE as "rival allies" in the trade and investment sphere, Ameri believes that when it comes to crypto, “There are a lot of synergies and a lot of things happening between Saudi [Arabia] and the UAE that complement each other.” He pointed to the fact that the UAE and Saudi Arabian central banks have agreed to launch a joint cross-border cryptocurrency as evidence that the two countries are “brothers,” at least in this area.

Hasan suspects the motivations may be rather different, however. He said Saudi Arabia's “unofficial goal” is “to surpass the UAE in almost everything.” He argued that this is true “even with the tourism that [the government] has been banking on — if you look at what’s happening in NEOM and the Red Sea, the agenda is very, very clear.” He was hopeful that this rivalry with the UAE “is what is going to bring about changes.”

Although Saudi Arabia is by far the biggest economy in the Middle East, it is unlikely to displace the UAE as the region’s crypto hub anytime soon. As Ameri noted, “The UAE is much more advanced and is the first to enter the market,” and has already attracted global crypto exchanges to establish headquarters in the country. Hasan also argued that despite the apparent change in approach from the kingdom, “It will always take a fair amount of time to actually translate into any shifts in the environment.”

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in


The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.


What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise AI-driven

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

Text Alerts - Be the first to get breaking news, exclusives, and PRO content.

All premium Industry Newsletters - Monitor the Middle East's most important industries. Prioritize your target industries for weekly review:

  • Capital Markets & Private Equity
  • Venture Capital & Startups
  • Green Energy
  • Supply Chain
  • Sustainable Development
  • Leading Edge Technology
  • Oil & Gas
  • Real Estate & Construction
  • Banking

We also offer team plans. Please send an email to and we'll onboard your team.

Already a Member? Sign in

Start your PRO membership today.

Join the Middle East's top business and policy professionals to access exclusive PRO insights today.

Join Al-Monitor PRO Start with 1-week free trial