From oil to fintech: Saudi Arabia grants first trial licenses

From oil to fintech: Saudi Arabia grants first trial licenses

Yesterday, the Capital Markets Authority (CMA), namely Saudi Arabia’s securities regulator, has granted its first trial fintech licences to crowdfunding firms Manafa Capital and Scopeer respectively.  The move is part of Saudi’s extensive economic reform programme that aims to reduce the middle eastern country’s reliance on oil revenue.

The CMA believes that the crowdfunding platforms will broaden the country’s capital markets, and ultimately create new jobs by providing entrepreneurs with an alternative source of funding for new ventures. Individual investors will chip in via crowdfunding platforms operated by Riyadh-based Mafana Capital and Scopeer to fund small and medium-sized enterprises in exchange for shares.

Despite expressing prior reservations with fintech investments (specifically cryptocurrency trading), Saudi Arabia’s central bank has nonetheless begun to see it as a viable way of diversifying their economic revenue. In February, it inked a deal with Ripple to help banks in the kingdom settle payments through its blockchain infrastructure. More recently in May, The Saudi Ministry of Communications and Information Technology partnered with ConSensys to host an Ethereum-themed blockchain bootcamp to provide in-depth training in building decentralised apps.

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