Saudi Arabia's Central Bank Injects Liquidity in Local Banks via Blockchain

The Saudi Arabian Monetary Authority (SAMA), the country’s central bank, today revealed that it has recently used Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term technology to deposit part of the liquidity that SAMA had previously announced, to be injected into the banking sector. This move is part of SAMA's actions aimed at enhancing the sector's capabilities to continue its role in providing credit facilities.

SAMA further said that the blockchain deployment is part of its continued efforts to explore and experiment with emerging technologies. Specific details of the initiative remain unknown.

SAMA did not provide the amount of liquidity injection via blockchain, but last week the central bank decided to inject a total of 50 billion Saudi riyals (~$13.35 billion) to enable banks to support the private sector, according to market sources.

Developing fintech in the Kingdom

SAMA said in its statement that it is is one of the pioneer central banks to experiment blockchain technology for money transfers. It noted that this move was one of the key innovative initiatives launched by SAMA in its program to enable and develop fintech in the Kingdom. Others were the Fintech Saudi Initiative in cooperation with the Capital Market Authority, the introduction of SAMA Regulatory Sandbox, and an array of digital banking services and Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term.

SAMA was established in 1952 and is based in Riyadh. It was previously known as Saudi Arabian Monetary Agency.