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Saudi SAMA succeeds with blockchain fund transfers

Saudi’s Central Bank SAMA captured the attention of the international blockchain and finteh communities when it completed a deposit of funds using blockchain.

The exact amount of the fund transfer was not revealed The event funding comes after SAMA injected 50 billion riyals ($13.3 billion) into local banks on June 1. SAMA also did not disclose which banks received liquidity injections over blockchain

Saudi’s Central Bank SAMA captured the attention of the international blockchain and finteh communities when it completed a deposit of funds using blockchain.

The Saudi Arabian Monetary Authority (SAMA) said that the funds were a part of the bank’s initiative to enhance its “capabilities to continue its role in providing credit facilities.” 

The exact amount of the fund transfer was not revealed. 

Bahrain and the UAE are also early adopters of the technology and Saudi seems to be well on its way to claim its position as a regional player in the field.

In 2018, SAMA partnered with the UAE’s central bank to develop a digital currency that can be used for cross-border transactions between the two countries.

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“SAMA is one of the pioneer central banks to experiment [with] blockchain technology for money transfers, this move is one of the key innovative initiatives launched by SAMA in its program to enable and develop Fintech in the Kingdom.”

The event funding comes after SAMA injected 50 billion riyals ($13.3 billion) into local banks on June 1.

Coindesk said banks maintained an average Liquidity Coverage Ratio (LCR) of 201%, meaning Saudi banks had more than enough cash on hand to cover short-term obligations.

 SAMA also did not disclose which banks received liquidity injections over blockchain. Furthermore, it did not state what blockchain platform it had used.  

The action appears to be the first case of SAMA providing liquidity via blockchain. It is not, however, the central bank’s first foray into blockchain tech. SAMA began trialing Ripple’s xCurrent for cross-border payments in 2018.