Saudi Arabia Ministry of Finance Holds first Knowledge Gathering on Blockchain

On September 9^th 2019, the Ministry of Finance in KSA held the first Knowledge Gathering session to discuss Blockchain. H.E. AbdulAziz Al Freih, Head of strategy committee at the Ministry of Finance in KSA began the session and talked about the need to understand the technology and the importance of these gatherings and the topic.

The session included discussion of real use cases being implemented in KSA across both the public and private sector. For example Mr. Fabio Chesini head of research at Gartner gave a detailed explanation about blockchain and its use cases.

In addition Ministry of Interior of KSA also shared their Blockchain use case, called “Furijat” which connected well doers and philanthropists who were interested to free prisoners who are in jail for financial crimes. Leitenant Yehya AL Ghandi spoke about “Furijat”, stated that more than 1000 prisoners have been set free since the project was launched in Ramadan that connects these good doers with prisoners directly without need for third party using blockchain technology.

AL Rajhi Bank represented by Mr. Mansour Alasiri, Managing Director spoke about their Blockchain use case with Ripple for settlements and payments.

In addition Saudi Customs also presented their blockchain project with TradeLens from IBM. Mr. Mohammed Al Otaibi presented what was done with TradeLens. He discussed the benefits as well as challenges of Tradelens. He also discussed how they are moving forward with having information on the Blockchain starting from the factory. He discussed the need for governance model and how they are working on the most important use cases for trade and shipping.

The discussion went on to the importance of digitization and Blockchain during the group session which included, Dr. Essam bin Abdullah Al-Waqit, CEO of KSA Digital transformation Unit, Ahmed AlSuwaiyan, undersecretary of Technology and IT at KSA Ministry of Finance, and H.E. Hisham Al Hogail Deputy Governor for Banking operations at SAMA (Saudi Arabian Monetary Authority) and Mr. Saleh Mosaibah, STC Pay chief executive officer.

Discussion also focused on the need for regulations for implementing not only blockchain but cloud computing, AI and IOT (Internet of things). Mr. Mosaibah also discussed the role of Blockchain in B2B relations and payments. He added we should work on solving problems that decrease frictions, increase efficiencies using technologies such as Blockchain, AI, and others. WhilE. H.E. Hisham Al Hogail Deputy Governor for Banking operations at SAMA (Saudi Arabian Monetary Authority talked about the "Aber" project between UAE and KSA, and how if it succeeds can be implemented with other countries across the globe.

Discussion also centered on Open Data and how the government in KSA is working on this project through Yesser and the need to define the data sets. Finally discussion also focused on permissioned base blockchain versus public and how there will be both depending on use case.

The full two hour session can be seen online using this link https://www.pscp.tv/w/1yNGapjgYAgKj

Last month The Ministry of Finance (MOF) of KSA issued a warning against dealing or investing in virtual currencies including cryptocurrencies as they are not recognized by legal entities in the kingdom. The website stated that these were outside the scope of the regulatory framework and are not traded by financial institutions locally. Such crypto currencies have been associated with fraudulent activities and attract suspicion of use in illegal and illegitimate financial activities in addition to their high-investment risks related to frequent price fluctuations.

However it is evident that while the Ministry of Finance in KSA does not recognize or endorse dealings with cryptocurrencies, it does support the technology behind it, Blockchain and is working with both private sector and public to advance the implementation of Blockchain withn KSA digitization efforts.