Saudi Central Bank Invests $60 Billion in Bitcoin via Strategy

The Saudi Central Bank has made a significant move by investing in Strategy, a company known for its substantial holdings in Bitcoin. This investment grants the Kingdom its first indirect exposure to the world’s largest cryptocurrency by market cap, amounting to 568,840 BTC, valued at nearly $60 billion. The investment was revealed in a May 16 filing with the U.S. Securities and Exchange Commission, which showed that the Saudi Central Bank holds 25,656 shares in Strategy.

This strategic move by the Saudi Central Bank reflects a broader shift in global reserve strategies. Traditionally, central banks have favored gold and U.S. dollars as reserve assets. However, Saudi Arabia appears to be exploring a hybrid approach, balancing stability with the upside potential of digital assets. This investment mirrors the strategy of Norway’s sovereign wealth fund, which holds shares in crypto-forward firms like Coinbase and Strategy to gain market exposure without directly holding Bitcoin.

Saudi Arabia’s investment in Strategy comes amid rapid crypto adoption in the Middle East, particularly within the Kingdom. The region surpassed 500,000 average daily crypto traders in February 2024, with Saudi Arabia recording 129,397 daily crypto users at its peak. This figure surpassed the UAE’s 106,111. According to Chainalysis’ 2024 MENA report, the Kingdom’s crypto economy is expanding faster than any other in the region, marking 154% annual growth for the second straight year. The country’s momentum is driven by interest in blockchain innovation, CBDC exploration, gaming integration, and broader fintech development, all of which align with its Vision 2030 goals to modernize and diversify its economy.

Despite the rapid growth in crypto adoption, Saudi Arabia, like other GCC nations, has not implemented a complete regulatory system for cryptocurrency operators. While adoption rates climb, no domestic exchanges operate under regulatory oversight. This regulatory gap persists despite growing market activity. Ihsan Buhulaiga, a respected economist and former member of the Saudi Shura Council, recently called for GCC-wide regulatory alignment, warning that fragmented policies risk undermining regional competitiveness. Even without a comprehensive virtual asset regulatory framework, Saudi Arabia is forging ahead. For example, in June 2024, the Saudi Central Bank joined the mBridge initiative, a cross-border CBDC payment network designed for international oil trade between China and Saudi Arabia.

Saudi Arabia’s foray into Bitcoin coincides with increased interest from traditional financial giants. Goldman Sachs and Rothschild have recently expanded operations in Riyadh. Goldman spearheads three tokenization projects globally. Saudi Arabia’s young population drives its crypto transformation. Nearly two-thirds of Saudis are under 30. They embrace technology quickly, making them ideal adopters of blockchain and digital currencies. Strong institutional backing and flexible policies amplify this advantage. Together, these factors position Saudi Arabia as a future leader in global crypto adoption.