Saudi Arabia’s Riyadh may be crypto’s sleeping giant: Crypto City Guide
4 months ago Benito Santiago
City: Riyadh Country: Saudi Arabia Population: 7.82 million (Metro) Founded: 1737 Language: Arabic
In the middle of the An-Nafud desert is the third most populous city in the Middle East, Riyadh, Arabic for “the plain”. But it might not be the first place that comes to mind when you think of crypto and gaming.
Cryptocurrency is a gray area, not restricted or accepted, and can be difficult to access.
Despite this, according to a survey by KuCoin, 14 percent of Saudi citizens aged 18 to 60 own crypto. Morad Irsane, CEO of Takado – blockchain for halal insurance – takes this as clear evidence of the direction things are going. He tells the magazine:
“You can't buy, you can't sell, but you still have access to the fastest growing number of crypto owners!”
The area was founded by the Banu Hanifa tribe and was established 1,000 years later in 1737 when a wall was built to unify the many oasis towns or “meadows”. Wealth grew in agriculture, and in 1774, the first Saudi kingdom established its capital in nearby Diriyah. Two hundred and fifty years later, the city expanded to become the capital of modern Saudi Arabia.
Ahmed Yusuf, an American who has lived in Saudi Arabia since 2015, explained the local approach to crypto to Magazine: “It's not illegal or legal – maybe it's frowned upon, but it's used.”
He describes banks as broadly cautious and unfriendly to crypto, saying the government is basically biding its time because “they don't want to regulate until they understand.”
“Government does not exist” suggests recent market instability [of Saudi Arabia] It will be bold like El Salvador” and risk promoting an investment that will cause citizens to lose money.
Despite this, “20%–30% of my classmates own or have touched a crypto business,” a local finance student told the magazine. They were present at the outdoor arena in Riyadh in April, where they attended the magazine. He works at Alinma Bank, which provides financial services compliant with Sharia law.
Previously, it was easy to buy cryptocurrency as funds could be transferred “B2B – Banks to Binance”. However, due to Binance's many publicized problems, banks have started blocking such transfers, even closing accounts.
As a result, peer-to-peer trading, where buyers and sellers exchange money between their personal bank accounts, has become common among the student community, both through professional brokers and informally. There is no personal income or capital gains tax in the Kingdom.
It has become common to use foreign bank accounts for such transfers, with Bahrain being a common gateway.
Given the difficulty of integrating crypto with banking and fiat transfers, there is no culture of buying or selling things or services for crypto – instead, the focus is on holding and trading.
According to Yusuf, some big players, like the family offices of wealthy locals, are also interested in crypto action. “There is no direct way for them to buy, so they use indirect means. I'll leave it at that,” he concludes.
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ToggleFrom Game to Web3
Outdoor Edge Riyadh was opened by Prince Faisal bin Bandar bin Sultan Al Saud, chairman of the Saudi eSports Federation and Arab eSports Federation.
He spoke passionately about his passion for gaming and the potential of the metaverse and was joined by Yat Siu, chairman of the event's main sponsor, Animoka Brands. Xiu declared Saudi Arabia's position in the Middle East equal to China's in Asia.
“When China finally decided to enter the market, it was first a regional influence, then a global influence. I think Saudi Arabia has the same potential as one of the richest countries in the world.”
While the word “cryptocurrency” was largely condemned at the event, Siu's message seemed clear: Saudi Arabia may not be a big mover in the blockchain and crypto realm, but it's a big sleeper in terms of wealth, population, and influence. It can set the tone of the industry for the entire region.
The presence of Siu is not surprising. Last month, Animoka Brands partnered with the King Abdulaziz City for Science and Technology, or KACST, a government body that promotes technical innovation. The partnership aims to establish a Web3 hub to support Riyadh startups and aims to support university research into the blockchain game.
With Prince Faisal giving his public blessing, it is clear that the kingdom is opening the door to the opposite.
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Gaming is one of the kingdom's diversification targets in its Vision 2030 move away from dependence on the oil industry – a welcome diversion for the city's young population, whose weather conditions are often unsuitable for outdoor activities. The combination of blockchain and games represents a natural step to become the center of future crypto.
“By establishing the Web3 Hub and growing the Web3 ecosystem in Saudi Arabia, we want to revolutionize the development of blockchain and digital innovation,” commented Mariam Nuh, Vice President of Future Economy at KACST.
The partnership with Animoca is by no means a first for the industry. In the year In January 2020, Saudi Aramco, the state oil company, joined other energy companies to invest $5 million to simplify commodity trading by placing transactions on a corporate blockchain to eliminate the paper-based processes still standard in oil. Sector.
Regional rivalry?
Yusuf is the CEO of Vision Innovation, which advises Saudi government entities on blockchain adoption related to aviation and healthcare. Yusuf describes his work as a slow process of education and advocacy: “We want them to know that this is an important technology.”
“When we talk to the government, we don't talk about crypto – we talk about what Web3 can do.”
Because customers are “not yet very friendly to public blockchains,” Yusuf says options like zero-knowledge-proof chains, which would allow governments to enable blockchain features without losing control of the data. He gives an example of healthcare data that cannot be uploaded to the cloud because the data must remain local.
As a business hub, Riyadh attracts companies from the 32 million-strong country and surrounding countries. In terms of the blockchain space, it is closely linked to nearby Dubai, serving as a regional magnet for the industry.
However, according to Irsan, the UAE's approach is not reliable due to the constant changes. It is more aimed at attracting foreigners and their money. On the other hand, Saudi Arabian officials say, “There is no need for people to buy houses here.” They have a large population.
Indeed, many locals are quick to point out that the UAE's quick move to embrace the industry, due to the country's small size, is an attempt by larger Saudi Arabia to implement its own strategy.
As a gaming development hub, the city has seen a number of blockchain development firms and consultants, many of which serve projects abroad.
“They are turning a blind eye because they want this innovation to grow. You see a few startups based out of Saudi Arabia creating real blockchain solutions.”
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Elias made us
Elias Ahonen is a Finnish-Canadian author based in Dubai, who bought his first Bitcoin in 2013 and has since worked as a small blockchain consultancy around the world. His book, Blockland, tells the story of the industry. He holds a Master's degree in International and Comparative Law and wrote a thesis on NFT and Metaverse Regulation.
Follow the author @eahonen
