Saudi Arabia Emphasizes Measured Approach to Cryptocurrency Innovation

Saudi Arabia's Central Bank and Capital Market Authority have emphasized a "measured approach" to cryptocurrency innovation, aiming to balance technological progress with the stability of the financial system. This stance, as of June 2025, reflects the kingdom's commitment to fostering innovation while mitigating potential risks associated with digital currencies.

The regulatory framework advocated by Saudi Arabia aligns closely with the United Arab Emirates' approach, focusing on controlled market growth and technological adoption. This alignment positions Saudi Arabia as a regional leader in cryptocurrency regulation, emphasizing the importance of a balanced approach to innovation and financial stability.

In July 2024, Saudi Arabia's regulatory entities, the Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority (CMA), appointed Mohsen AlZahrani to lead SAMA's Virtual Assets initiatives. AlZahrani's role underscores the kingdom's commitment to a measured regulatory approach, ensuring that fintech innovations are integrated into the financial system in a controlled manner. This appointment is part of a broader regulatory shift aimed at avoiding outright bans while engaging with global trends and regional successes, such as the UAE's Virtual Assets Regulatory Authority (VARA) regime.

Saudi Arabia's strategy for cryptocurrency regulation aims to enhance market confidence by fostering innovation within controlled parameters. This approach has led to rising transaction volumes and growing retail interest in the crypto market. Expert analysis predicts sustained crypto trading activity, potentially attracting institutional investors through strategic dialogues with global exchanges. The kingdom's focus on regulatory clarity is expected to fuel robust technological advancements and cross-border projects, positioning Saudi Arabia as a leader in the digital economy.

Since 2019, Saudi Arabia's partnerships with Ripple and IBM have driven a gradual evolution in its regulatory approach to cryptocurrencies. These collaborations highlight the kingdom's careful balance between innovation and compliance, mirroring successful frameworks seen in the UAE and Bahrain. The emphasis on regulatory clarity is expected to enhance market dynamics, fostering technological advancements and cross-border projects. Mohsen AlZahrani from SAMA highlighted, "Our approach to crypto innovation is a balanced one, focusing on financial stability while exploring new technological advancements."