SAMA uses blockchain technology in money transfers with banks

By Edil Corneille

The Saudi Arabian Monetary Authority (SAMA), the central bank of the country, has revealed that it recently used blockchain technology to deposit part of the liquidity that it had announced earlier for the banking sector. The agency had decided to pump an amount of 50 billion riyals to enhance liquidity in the banking sector and enable it to continue its role in providing credit facilities to all its clients.

The move comes as an extension of SAMA’s efforts in exploring and experimenting with the dimensions of modern technologies and keeping pace with the global trends of central banks in assessing their effects on the financial sector.

In a statement, the central bank mentioned, “It is worth noting that the Saudi Arabian Monetary Agency is one of the first central banks to initiate an experiment using blockchain technology in financial transfers, which is one of the innovative initiatives launched by the institution, within its endeavors to enable and develop financial technologies in the Kingdom, such as: The Saudi Vintek Initiative (with participation With the Capital Market Authority), the experimental legislative environment, digital banking services, and digital payments.”

Recently, SAMA announced the licensing of 2 payment services companies – Tap and BrightWare, after the success of their trial period through the regulatory environment of the organisation (Regulatory Sandbox) for innovative financial services and products in the Kingdom.

In April, His Excellency Dr. Ahmed bin Abdul Karim Al-Khulaifi, Governor of the Saudi Arabian Monetary Agency (SAMA) valued an initiative of the Saudi banks to support the social fund launched by the Ministry of Human Resources and Social Development and the General Authority of Endowments at the amount of 100 million riyals, in light of the coronavirus (COVID-19) pandemic.