Last Updated on February 22, 2024 by Hamza Khan
The fintech sector has come to understand how revolutionary blockchain technology can increase revenue, enhance the end-user experience, streamline the delivery process, increase efficiency, and lower business risk. 2022 marked a new era for fintech companies and other businesses across the globe. Governments and organizations worldwide, including those in the Middle East, have made much progress in adopting blockchain technology.
Since the early 2000s, several fintech companies have been flourishing. Still, businesses have seen enormous success in recent years by applying cutting-edge technology and customer-focused concepts to problems in the nation’s current financial institutions.
Despite the skepticism, it is still being determined whether blockchain and DLT will completely replace or fundamentally alter certain aspects of the banking sector. By comparing regional blockchain adoption patterns to global ones, this article aims to provide light on the use of blockchain technology in the Gulf states’ banking industry.
The role of blockchain technology in the Gulf States banking sector
Blockchain technology can also be integrated into foreign payment systems and remittances, such as correspondence, to modernize and replace it. This would allow for the verification and recording of transactions using blockchain technology in a distributed ledger.
The Gulf nations have been able to stay up with and take advantage of modern technical breakthroughs, increase productivity and efficiency, and enhance government services because of their successful creation of cutting-edge technological infrastructure.
Meanwhile, the Gulf central banks and monetary authorities are also beginning to understand the significance of blockchain to the Gulf state’s banking. This is a significant indicator that acceptance and usage in the region will continue to grow. Regional banks, companies, and financial institutions use blockchain platforms to transfer cryptocurrency funds and assets to local and regional equivalents more swiftly and affordably.
For instance, Saudi Arabia also signed a partnership agreement with IBM and Elm to examine methods for delivering governmental and commercial services via the blockchain network. In the UAE, the Abu Dhabi Securities Exchange (ADX) and seven central securities depository (CSD) firms signed a memorandum of agreement outlining a roadmap for implementing blockchain and distributed ledger technologies.
The Saudi Arabian Monetary Authority (SAMA) has joined the RippleNet-associated banking blockchain network to assist domestic banks in settling payments and transactions with regional banks to secure money transfers more quickly and inexpensively. Following this pattern, Al Rajhi Bank sent the first blockchain-based wire transfer from its Riyadh headquarters to one of its branches in Jordan. Centi, a fintech startup with Swiss roots, plans to enter the Middle East cross-border remittances industry because it thinks its blockchain-based technology may “redefine remittances services” in the area.
According to the founder, Ralf Zellweger, Arab immigrants residing in Germany and other nations [in Europe and other areas of the West may find it difficult to obtain regular banking services. Thus our services can be beneficial to them. Thanks to the platform, they can send money home swiftly, securely, and affordably.