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Business & Finance

Saudi Arabia is Investing in Fintech to Overcome Dependence on Oil Export

The CMA (Capital Market Authority) of Saudi Arabia is a government organization applying full financial, legal, and administrative independence, and has direct links with the Prime Minister responsible for capital markets in Saudi Arabia. The organization granted finance technical licenses to two well-established firms based in Capital city, Riyadh. These licenses have been issued to the companies on trial basis and it will allow them to offer crowdfunding investment services in the oil-rich country.

One of the two companies that received the license is Manafa Capital, established in October 2003, a holding company & investment house with a significant presence in the Middle East and the other one is Scopeer, which is the first crowdfunding platform established in Saudi Arabia that gives entrepreneurs the opportunity to take control of raising funding from their own network of friends, family, customers and even strangers. Saudi Arabia’s securities regulator approved its first two financial technology licenses, part of a drive to develop a fintech sector in the Arab world’s biggest economy under reforms designed to reduce reliance on oil exports.

These fintech licenses, which are part of the CMA’s Financial Technology Laboratory initiative, and dubbed the Financial Technology Laboratory Licenses (FTLL), are part of a larger plan and wider reforms – the Saudi Vision 2030 to develop the fintech sector in the country and reduce the Arab kingdom’s dependence on oil exports. The move is also expected to contribute towards broadening the country’s capital markets by enhancing competition via the provision of innovative finance methods and creating more jobs by providing avenues for funding of SMEs.

According to the CMA’s Deputy for Strategy and International Affairs, Dr. Bander Assad Alsajjan;

The FTLL for crowdfunding services aims to provide opportunities to invest in small-to-medium-size companies and finance their activities; by bringing them together with interested investors through electronic platforms. The crowdfunding platforms will provide the capital needs of young entrepreneurs with new business ideas, which will assist in closing the gap between new entrepreneurs and traditional funding methods.

Saudi Arabia has expressed great interest in expanding fintech industry; earlier this year, the kingdom signed a deal with fintech startup Ripple (the company behind XRP), which will help banks in the country settle their payments via the use of blockchain technology, and Ripple’s xCurrent product, in particular.

Cryptocurrency according to world top entrepreneurs

Its been a wild ride for cryptocurrencies over the last year or so but the question is what happens next? During a conference last week on blockchain and cryptocurrency for startup academy in San Francisco, there were many negative and positive claims for the cryptocurrency. But there are more negative claimed than the positive ones like Bill Gates from Microsoft said;

Crypto directly or indirectly have resulted in deaths, as the main feature of cryptocurrency is the anonymity, which is not a good thing, and right now cryptocurrencies are being used in buying drugs, and helping terrorist activities, so it’s a technology that caused deaths in a fairly direct way.

the founder of Hotmail, Sabir Bhatia also criticized the cryptocurrency and said;

The underlying business model that I have looked at is fraud and cryptocurrencies are nothing more than a white a hope in the way the world will be.

Next is Yogesh Mehta, who is the CEO of Petrochem middle east, who also talked about cryptocurrencies in a criticized way and he said;

 i wouldn’t put one dollar in cryptocurrencies or into bitcoin because of am not the gambling kind of a person. I am a conservative person with regards to investing and I don’t believe in quicker returns.

On the other hand, despite all that negatively about bitcoin and cryptocurrencies there are many people like Dr. Habib Al Mulla, founder, and chairman of Baker McKenzie, Habib Al Mulla believes that cryptocurrency and blockchain still has a very bright future. He said;

Cryptocurrencies and blockchain are the future, and the only reason that there are such negative claims and such negative energy around the topic is that regulators and Governments are afraid of being unable to control these digital platforms and these digital currencies. You will hear many warnings that cryptocurrencies are risky, they are not regulated, they are being used in illegal activities, i would simply say do not listen to these claims they stem from the fact that regulators and governments are struggling to have control over them.

The crowdfunding platforms will provide the capital needs of young entrepreneurs with new business ideas, which will assist in closing the gap between new entrepreneurs and traditional funding methods.

Muhmmad Furqan

Furqan is a financial markets expert. A regular trader of cryptocurrencies and hold some investments in Bitcoin, Stellar, IOTA and OST. Contributes with latest industry insights. Contact the editor at editor.opinions@blockpublisher.com

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