The Ethereum Riyadh 2023 conference held on October 11th brought together an array of blockchain experts and entities, including Saudi Digital advisor for a Saudi governmental entity, who gave a presentation on embracing DeFi for business excellence. As per the press release, Abdulelah Aloshayni, digital transformation advisor at a Saudi Governmental entity provided a clear understanding of DeFi and discussed potential applications for large companies and government organizations.

This is no surprise given the work that for example SAMA ( Saudi Central Bank) is doing on CBDC, virtual assets and DeFi. Saudi Central Bank had hired Mohsen Al Zahrani to lead their digital assets and CBDC projects.

Abdulelah Aloshayni gave a presentation on “Embrace DeFi for Business Excellence.” He provided a clear understanding of DeFi and discussed potential applications for large companies and government organizations.

ETH Riyadh 2023 conference successfully took place at the CODE Lab of King Saud University at Riyadh, the capital city of Saudi Arabia. ETH Riyadh 2023, Web3 technology summit, was dedicated to the Ethereum ecosystem and blockchain technology, aiming to gather developers and builders from Riyadh, Saudi Arabia, and other regions in the Middle East.

ETH Riyadh emphasized a strong technical focus and aimed to provide insights from industry experts, fostering discussions on blockchain and Web3 cutting-edge technologies.

The ETH Riyadh organizing committee was composed of Tharawat Technology, Studio1727, ChainIDE, Coffee with Crypto, and Mask Network. The event received guidance and support from the Saudi Ministry of Communications and Information Technology, the Saudi Internet Association, and the KACST Digital Entrepreneurship Center. It was generously sponsored by Ankr (Title Sponsor), with presenting sponsorship from Chiliz, as well as support from Zilliqa, Adaverse, SAO Network, Onekey, Matrix World, and more than ten other Web3 projects.

Over 150 participants attended the event.  The ETH Riyadh 2023 conference kicked off with a keynote address by Tim Beiko, a representative of the Ethereum Foundation, who presented “Ethereum Governance Overview.” Tim Beiko outlined various ways to engage in Ethereum technology development and contributions, along with collaboration opportunities.

In the first roundtable discussion, Anton Agafonov, Product Lead at Zilliqa, Arpit Sharma, Managing Partner for the Middle East, India, and East Asia at the Near Foundation, and Aqeel Mohammad from the Ethereum Foundation discussed “L1/L2: Web3 Infrastructures and Innovations  from various perspectives, sharing their insights on Web3 infrastructure and innovation.

Xiao Wu, the founder of ChainIDE, then spoke on “The Road to Mass Adoption: Web3 Ecosystem in East Asia x Middle East Africa Region.” He shared insights into the development of Web3 ecosystems in East Asia and the Middle East and Africa regions, discussed the digital economy’s opportunities, and analyzed attempts and cases of large-scale applications in different regions.

While Dr. Waleed Aloriny, Chairman of the Saudi Internet Association, delivered a welcome address and moderated a special roundtable discussion on “Opportunities of Web3 Technology in Saudi.” Yasser Alobaidan, CEO of Tharawat Technology, Xiao Wu, Founder of ChainIDE, Stanley Wu, CTO of Ankr, and Alex Dreyfus, CEO of Chiliz, participated in the discussion. Representatives from various sectors engaged in lively discussions on Saudi’s entrepreneurial environment, policy regulations, Web3 development, digital economic opportunities, and international cooperation. Web3 entrepreneurs present recognized Saudi Arabia as a significant opportunity and expressed their desire to deepen their business and collaborations in the region.

ETH Riyadh 2023 marked a significant milestone as the first dedicated Web3 developer and blockchain technology summit in the Saudi Arabian region, particularly in Riyadh. This event represents a major advancement in the Web3 developer ecosystem of Saudi Arabia. ETH Riyadh has contributed to the flourishing of the local blockchain developer community, providing a platform for learning and networking for local developers and entrepreneurs.

The event has not only attracted local participants but also garnered attention from experts and investors from around the world. It serves as a crucial role in driving the development of blockchain technology in Saudi Arabia, offering a pivotal opportunity for exploring and shaping the future of the blockchain field. Furthermore, it plays a role in promoting digital innovation and economic growth in Saudi Arabia.

Xiao Wu, Founder of ChainIDE and a member of the ETH Riyadh organizing committee, expressed, “ETH Riyadh is the first summit in the Saudi region that focuses on blockchain technology and Web3 developers. It serves as a superhub for the local technology community and ecosystem development. Saudi Arabia is currently experiencing a pivotal period of rapid growth in the digital economy, and blockchain and Web3 technologies are integral components of the next generation of digital economies. We look forward to ETH Riyadh 2024, expecting to attract more builders in blockchain technology and facilitate increased collaboration and exchange among developers in the East Asia and Middle East and Africa regions.”

While the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in Marrakech, Morocco communicated their appreciation to the IMF and FSB for putting together the IMF-FSB synthesis paper and their adoption of the roadmap on crypto assets offered in the synthesis paper, The Saudi Central Bank (SAMA) Governor Ayman Alsayari said that cryptocurrencies and their brokers pose a potential threat to financial stability.

The detailed and action-oriented Roadmap was considered by G20 FMCBG meeting attendees as essential to achieving their common goals of macro-economic and financial stability and to ensure effective, flexible, and coordinated implementation of the comprehensive policy framework for crypto assets.

Members called for swift and coordinated implementation of the G20 Roadmap, including implementation of policy frameworks; outreach beyond G20 jurisdictions; global coordination, cooperation and information sharing; and addressing data gaps. Members also asked the IMF and FSB to provide regular and structured updates on the progress of implementation of the G20 Roadmap on Crypto Assets.

As noted in their communiqué, “We support the ongoing work and global implementation of FATF standards on cryptoassets.”

On the other hand, The Saudi Central Bank (SAMA) Governor Ayman Alsayari said that crypto currencies and their brokers pose a potential threat to financial stability. At the meeting he stated, “We need good supervision, regulation, and coordination of crypto currency activities. In this context, we support the work and relevant roadmap of the IMF and the Financial Stability Board to address risks related to crypto currencies.”

The SAMA chief said that the global economy is witnessing massive slowdown compared to past decades, with high levels of inflation rates. “Tight monetary policies are being adopted around the world to bring down inflation. As a result, the global growth rate is expected to be around three percent this year and next,” he said.

This comes as Saudi Arabia develops its CBDC for internal bank payments and works on its virtual asset regulations.

Anthony Butler, the Chief Technology Officer for IBM MENA region who was based out of KSA, and is a blockchain, AI, metaverse expert has joined Saudi Central Bank (SAMA) as a senior advisor.

He announced the new position on LinkedIn saying, “I’m happy to share that I’m starting a new position as Senior Advisor at Saudi Central Bank – SAMA! As a senior advisor to SAMA I will be focused on  first of a kind applications of emerging technology, such as artificial intelligence, distributed ledger technologies, quantum, and advanced cryptography in support of payments innovations (such as CBDC, stable coins, and tokenization), transformation of Suptech/Regtech, green finance,  open finance, decentralized finance (DeFi), and cybersecurity.

Anthony Butler had spent 15 years as chief technology officer for IBM in the Middle East and Africa working in emerging technologies, with a specific focus on the application of artificial intelligence, blockchain and metaverse technologies.

Anthony is well versed speaker and writer on emerging technologies. On his Blog page he talked about the impact of emerging technologies, such as blockchain and artificial intelligence, on societies and economies. 

He also notes on his page, that he lives in and supports the development of one of the most exciting and future-oriented places in the world, the Kingdom of Saudi Arabia. 

In one of his articles he discusses the collapse of FTX currency exchange, and believes there is a need to evolve new models of decentralized finance that will mitigate risks. He adds that if a person does not own their keys they cannot own their digital tokens.

He notes, “Decentralized Finance (DeFi) is likely to hold the long term answer to much of this: decentralized exchanges will use blockchain technologies to remove the need for trust.  They will provide permissionless, transparent, exchange services where users will have self-sovereign custody of their digital assets without the need to transfer control to a centralized authority to manage on their behalf.”

Anthony Butler had also been involved in KSA Central Bank’s ABER CBDC project with the UAE Central Bank. At the time he noted in a tweet, “What is new and challenging is we are designing it so that it can be issued by two central banks simultaneously.  Many hard problems being solved and lots of lessons to be learned but exciting times ahead; and great example of the visionary leadership of both @SAMA_GOV and CBUAE.”

This is not the first major appointment of an expert in the digital asset, blockchain space by SAMA, prior to this they had appointed Mr. Mohsen AlZahrani, Virtual Assets (VA) and CBDC program Lead, who was recently discussing KSA’s wholesale CBDC project at R3 Corda Day in UAE.

The Saudi Central Bank (SAMA) released a press release where it confirmed that the Central Bank is continuing to experiment on Central Bank Digital Currencies (CBDC).  SAMA is currently working on a project that focuses on domestic or national wholesale CBDC use case in collaboration with local banks and FinTech’s.

Experts explained to LaraontheBlock that this is a CBDC for local wholesale bank settlements. 

This project is part of SAMA’s ongoing research and experimentation on CBDC. SAMA is seeking to research and explore the economic impact, market readiness, and  potential robust and fast applications of a CBDC based payment solution. 

As per the news, SAMA seeks to review policy, legal and regulatory considerations before moving to the next phases of the CBDC journey to contribute to achieving the objectives of Saudi Vision 2030.

H.E. Fahad Almubarak, Governor of SAMA stated “Local banks and payment companies will always be a cornerstone of this project and its implementation, we have engaged both local banks and FinTech’s, as well as other market players and third party consulting and technology providers, to gain a better understanding of CBDC’s functionality and to test various design options.” 

Noted as well, is that SAMA will continue to experiment on CBDC solution as an infrastructure enabler of innovation in financial services that has the potential to contribute to a more resilient payment ecosystem and accelerate digital transformation in the local financial sector.

SAMA stresses that although no decision has been made regarding the introduction of CBDC in the Kingdom, it continues to focus on exploring the benefits and potential risks of implementing CBDC. This will contribute to informed decision-making within SAMA and to CBDC explorations within the central banking community.

Prior to this announcement, SAMA had hired Mohsen Al Zahrani as Head of Virtual assets and CBDC program. This seems to be the first fruit of efforts made. 

In 2020  SAMA successfully conducted CBDC experiment “Project Aber” in 2019, an initiative in collaboration with the Central Bank of the UAE to examine whether distributed ledger technology could contribute to seamless cross-border payments.

During the 2023 World Economic Forum’s session on Financial Institutions innovating under pressure, the Saudi Arabian Minister of Finance Mohammed Al Jadaan states that while CBDCs have privacy issues they are fantastic tool in developing countries.

During the World Economic Forum’s session’ Financial Institutions innovating under pressure’ The Saudi Minister of Finance Mohammed al-Jadaan stated that while CBDCs have privacy issues they are a fantastic tool in developing countries.

While the panel discussed the risks that crypto and new technologies were posing especially given that crypto losses were over $1 trillion in 2022, most agreed that the regulation was a key element in mitigating these risks.

Saudi Finance Minister Al Jadaan also believes that the real risks of these innovations haven’t even been seen yet, and the one incident with the loss of 12 zeros has triggered a lot of thinking of what needs to be done.

He believes that Central Banks, traditional financial institutions and even innovators in Fintech need to discuss how to deal with Anti Money laundering issues, terrorism financing and entities that use these technologies to circumvent the regulatory framework.

When discussing CBDC (Central Bank Digital Currencies) Al Jadaan noted “Whether CBDCs and similar government sponsored currencies one will need to think about privacy.” He believes that the minute a government issues a CBDC or government sponsored cryptocurrency there is a compromise on privacy.

He states, “There is a lot of data to whoever is holding that currency.”

Yet he believes that CBDC is a fantastic tool in developing countries. He explains, “It can be used as a social safety net. CBDC can be used by people to exclusively buy milk, rice, oil but may not be allowed for other items.” He notes that while on one hand it is beneficial the other side of it is the risk of privacy invasion. ‘Bottom line no perfect solution.

Saudi Arabia piloted a CBDC with the UAE under the name ABER. The report on the final project was positive from a technical standpoint and the report highlighted the need for further use case trials.

In addition in July 2022, the Central Bank of KSA hired former Accenture Director Mr. Mohsen Alzahrani to lead the virtual asset and Central Bank Digital currency project at the bank.

It seems KSA is still studying the impact of CBDC implementation and is worried about the issue of privacy infringement.

Saudi Arabia’s Information and Communication technology Commission has launched a blockchain enabled identity tracking management system for Bulk SMS messages in an effort to decrease fraud and enhance trust in Bulk messaging service offerings.

The CITC utilized blockchain technology in both the governance and management of the system. The solution was launched during the Digital Technology Forum 2022 in KSA.

CITC explained that this system will track 34,000 trusted SMS service providers  as well as decrease the operational cost for sending bulk SMS by these service providers by 66 percent. The blockchain enabled system will also  decrease the time needed to process requests by 60 percent. In addition 20,000 governmental and private sector entities will benefit from this system.

The Blockchain enabled digital tracking management system will serve more than 46 million people as well as 25 local SMS service providers. The innovative solution aims to protect users and instill trust in service providers.

Interestingly the KSA Digital technology Forum dedicated a whole day on blockchain technology. The panel discussions included topics such as harnessing the Power of Blockchain for Digital Government with speakers from IBM, CasperLabs, and Oracle.

The forum also saw the participation of blockchain entities from the region including Avanza Innovations based out of UAE which showcased its enterprise blockchain, metaverse and Web3.0 success stories to KSA government and private sector.

Another Blockchain entity IR4ILab based out of KSA also participated at the Forum.

In addition Seamless KSA which will be held during first week of November 2022 will also host blockchain solution providers including DT One.

Not only that but in a press release from Seamless, it states that there will be discussions led by Mohsen Al Zahrani, head of virtual assets and CBDC initiative at Saudi Central Bank, given the accommodating stance that KSA is showing towards blockchain and cryptocurrency solutions.

So has Saudi started its blockchain, and crypto journey, it seems so!