Home » Saudi Arabia’s Riyadh may be crypto’s sleeping giant: Crypto City Guide

Saudi Arabia’s Riyadh may be crypto’s sleeping giant: Crypto City Guide

Saudi Arabia’s Riyadh may be crypto’s sleeping giant: Crypto City Guide

City: Riyadh
Country: Saudi Arabia
Population: 7.82 million (metro)
Established: 1737
Language: Arabic

In the center of the an-Nafud desert rises Riyadh, Arabic for “the meadows,” the third most populous city in the Middle East. But it’s likely not the first place that comes to mind when you think about crypto and gaming.

Cryptocurrency is a gray area, neither banned outright nor endorsed, and it can be tricky to access.

Despite this, research by KuCoin suggests that 14% of Saudis between 18 and 60 own crypto. Morrad Irsane, CEO of Takadao — a blockchain for halal insurance — takes this as clear evidence of the direction in which things are headed. He tells Magazine:

“You cannot buy, you cannot sell, yet still they managed to have the fastest-growing population of crypto owners!”

The area was founded by the Banu Hanifa tribe and established about 1,000 years later in 1737 when a wall was built to circle a number of oasis towns, or “meadows,” into one. Wealth grew with farming, and in 1774, the First Saudi State established its capital in nearby Diriyah. Two hundred fifty years later, the city has expanded to become the modern capital of Saudi Arabia.

The old city of Diriyah, from which the kingdom was first ruled. (Elias Ahonen)

Ahmed Yusuf, an American who has lived in Saudi Arabia since 2015, describes the local approach to crypto to Magazine as “not illegal or legal — maybe frowned upon, but it is used.”

He describes banks as broadly cautious and unfriendly toward crypto, with the government essentially biding its time because “they don’t want to regulate until they understand.”

He points to recent market volatility, speculating that “no government [of Saudi Arabia] would be as bold as El Salvador” and risk promoting an investment that might cause citizens to lose money.

Despite this, “20%–30% of my classmates own or trade crypto,” a local finance student tells Magazine. He attended the Outer Edge Riyadh forum in April, where Magazine was present. He works at Alinma Bank, which offers financial services that are compliant with Sharia law.

In the past, buying cryptocurrency was easy, as funds could be transferred “B2B — banks to Binance,” he jokes. However, the banks have since begun blocking such transfers due to Binance’s much-publicized troubles, even closing accounts.



For that reason, peer-to-peer trading, in which buyers and sellers transact money between their personal bank accounts, has become common both through professional dealers and informally among the student community. There is no personal income or capital gains tax in the kingdom.

The use of foreign bank accounts for such transfers has also become common, with Bahrain being a typical gateway.

Considering the difficulty of combining crypto with banking and thus fiat transfers, there is no readily identifiable culture of buying or selling things or services for crypto — instead, the focus is on holding and trading. 

According to Yusuf, some bigger players, like family offices of wealthy locals, also want in on the crypto action. “Since there are no direct ways for them to buy, they use indirect ways. I’ll leave it at that,” he concludes.

From gaming to Web3

Outer Edge Riyadh was opened by Prince Faisal bin Bandar bin Sultan Al Saud, chairman of the Saudi Esports Federation and Arab eSports Federation.

He spoke enthusiastically about his passion for gaming and the potential of the metaverse and was joined by Yat Siu, chairman of the event’s main sponsor, Animoca Brands. Siu declared Saudi Arabia’s position in the Middle East as equivalent to China’s in Asia:

“When China finally decided to enter the market, it first had a regional impact, and then afterwards a global impact. I think Saudi Arabia has the same potential as one of the richest nations in the world.”

Though the word “cryptocurrency” was largely avoided at the event, Siu’s message seemed clear: Saudi Arabia may not have made definitive moves in the realm of blockchain and crypto, but it is a sleeping giant in terms of wealth, population and influence, and can set the tone of the industry for the entire region.

Prince Faisal bin Bandar bin Sultan Al Saud on stage with Yat Siu at Outer Edge Riyadh. (Elias Ahonen)

Siu’s presence was no surprise. The previous month, Animoca Brands partnered with King Abdulaziz City for Science and Technology, or KACST, a governmental entity promoting technical innovation. The partnership aims to establish a Web3 hub to support Riyadh startups, with the further aim of supporting university research into blockchain gaming.

With Prince Faisal giving his public blessing, it is clear that the kingdom is cracking open a door to the metaverse.

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Gaming is one of the kingdom’s diversification targets for its Vision 2030 to move away from its reliance on the oil industry — a welcome direction from the young population of a city whose climate is unfriendly for daytime outdoor activities for much of the year. The combination of blockchain and gaming presents a natural step toward becoming a crypto hub of the future. 

A taste of Saudi hospitality after the summit. (Elias Ahonen)

“We seek to transform blockchain and digital innovation development by establishing the Web3 Hub and growing the Web3 ecosystem in Saudi Arabia,” comments Mariam Nouh, vice president of economies of the future at KACST.

The partnership with Animoca is by no means a first foray into the industry. In January 2020, Saudi Aramco, the state’s oil company, joined other energy companies to invest $5 million into Vakt, a firm that simplifies commodity trading by putting transactions onto a corporate blockchain to eliminate paper-based processes that are still the norm in the oil sector.

A regional rivalry?

Yusuf is the CEO of Vision Innovation, which advises elements of the Saudi government on blockchain adoption related to aviation and healthcare. Yusuf describes his work as a slow process of education and advocacy, as “we need them to know that this is a useful technology.”

“When we talk to the government, we don’t talk about crypto — we talk about what Web3 can do.”

Because his clients are “not too friendly to public blockchains yet,” Yusuf talks about options such as zero-knowledge-proof chains, which he reasons can allow governments to enable blockchain features without losing control of the data. He gives the example of healthcare data that cannot be uploaded into a cloud because the data has to remain in the country.

As a business hub, Riyadh attracts companies from across the 32 million-strong nation and surrounding countries. From the standpoint of the blockchain space, it is closely connected to nearby Dubai, which serves as a regional magnet for the industry. 

However, according to Irsane, the UAE’s approach is unreliable due to its constant changes. It is aimed more at attracting foreigners and their money. In contrast, Saudi Arabian authorities “don’t need people to come and buy a house here. They have the population.”

Journalist Elias Ahonen (right) with TakaDAO co-founders Morrad Irsane (center) and Sharene Lee (left) after an interview in Riyadh. (Elias Ahonen)

Indeed, many locals are quick to point out that they view the United Arab Emirate’s quick moves to welcome the industry as an experiment made possible due to the country’s small size, whose experiences the much larger Saudi Arabia can learn from when implementing its own strategy.

As a hub for gaming development, the city has seen a number of blockchain development firms and consultancies spring up, many of them serving projects abroad.

“They are kind of closing one eye because they want this innovation to grow. You will see a few startups that are creating real blockchain solutions based out of Saudi Arabia”

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