The Saudi Arabia Central Bank (SAMA) has appointed Mohsen AlZahrani as head of its virtual assets and Central Bank Digital Currency (CBDC) program. The banking regulator intends to establish itself as a leading destination for global digital asset firms through the move.
AlZahrani is no stranger to the chaotic world of digital assets, having served as a former managing director at Accenture and in several consultancy roles for firms in the industry. According to Bloomberg, AlZahrani reports directly to Ziad Al Yousef, the central bank’s deputy governor for development.
Insiders at the central bank hinted that AlZahrani’s appointment is the first in a string of incoming new hires to interface with the largest virtual asset firms on regulations. The move aligns with Crown Prince Mohammed bin Salman’s ambitious plans to transform the country into an attractive jurisdiction for tech firms.
Saudi Arabia’s next-door neighbor, the United Arab Emirates, has emerged as the market leader in recent months, spurred by positive regulation. Crypto.com, Binance, and FTX seized the opportunity to set up shop in Dubai ahead of the pack while other countries in the Gulf are left to play second fiddle.
Despite the slow pace of Saudi’s regulation of the digital asset industry, experts believe the nation can rub shoulders with other jurisdictions. The country’s status as the largest economy in the Middle East and its affluent population are considered positives by digital exchanges looking to widen their reach. Already, beleaguered crypto exchange Binance has been steadily increasing its staff strength in Riyadh, with other rival firms looking to take the same path.
Saudi’s tough stance set it backward
Saudi Arabia has endured a frosty relationship with digital assets, culminating in the central bank’s decision to preclude banks from processing virtual currency transactions. The decision has not been upturned and holds sway in 2023, with financial institutions reiterating the position to customers.
Although workarounds exist, the stance has set the country backward compared to its neighbors like the UAE and Bahrain in terms of digital asset adoption. Despite the ban, concerted efforts are being made to develop a (CBDC) to keep up with the trend of digitization.
In 2020, SAMA issued a joint statement with the Central Bank of the United Arab Emirates (CBUAE) over a collaboration for a jointly issued CBDC.
A recent survey carried out by KuCoin noted that there are over 3 million digital asset investors in Saudi Arabia, and 45% of respondents planned to increase their holdings. Seventeen percent of respondents stated their intention to buy virtual currencies, and the central bank’s recent hires might nudge the figures even higher.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: The BSV Global Blockchain Convention presentation, CBDCs and BSV
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