In June this year, the Council of Ministers approved license for two local digital banks, first to convert STC Pay to STC Bank with a capital of SR 2.5 billion and second the Saudi Digital Bank with a capital of SR 1.5 billion.
Al-Mubarak pointed out that some countries have started experimenting these systems of digital banking, and the Kingdom has a cross-border digital currency scheme with the United Arab Emirates. The Kingdom also enjoys to have a large project for financial technology.
The SAMA governor said that there is a unified currency for the clearing system among the banks in the region. “There is a currency exchange policy in the Gulf region that is very similar to digital transactions and depends a lot on the dollar. Therefore we have the ability, which exceeds the capability of any others in the region, to move to digital currency at the regional level,” he said.
Saudi Arabia has acquired experience with other partners in handling digital currencies by their respective central banks, Al-Mubarak said, while stressing that digital currencies will be within the banking system.
Al-Mubarak had said earlier that Saudi Arabia was seeking to come up with a low-cost digital central bank that simulates digital operations, which would have a hedge against the real liquidity held in central banks.
The governor drew attention to the fact that digital banks are subject to supervision and controls applied currently to commercial banks operating in the Kingdom, with an increased focus on aspects of technology, cybersecurity, combating money laundering and tracking down terrorist funding.
Al-Mubarak pointed out that digital banks provide services and products exclusively through electronic channels by adopting an innovative and sustainable banking business model to enhance financial inclusion and keep pace with cutting edge technological developments in the financial sector.
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