From Stablecoins to Tokenized Securities: Untapping Saudi Banking’s Blockchain Potential

I’ve had the privilege over the past year to be at the forefront of virtual asset experimentation in the KSA banking sector. In that time, the market has evolved at remarkable speed — driven by regulatory clarity abroad, customer demand, and bold moves from both fintechs and central banks. Here are my thoughts on how Saudi banks can best position themselves to capture the opportunities in this space.

*These are my personal views and do not necessarily represent the views of my employer.

Virtual assets — from tokenized deposits and CBDCs to stablecoins and tokenized securities — are no longer an experiment. They are becoming part of the core financial infrastructure in leading markets. Central banks are issuing bonds on-chain, global payment networks are settling transactions in stablecoins, and fintechs are embedding blockchain rails into everyday commerce.

The momentum is undeniable:

• Regulation is catching up in the US, Europe, Asia, and the Gulf, giving banks clarity and confidence to launch products.
• Customer expectations are shifting — corporates and consumers now demand the same speed, cost-efficiency, and 24/7 availability in payments that they enjoy in digital commerce.
• Competitors are moving fast— from Stripe enabling crypto payouts to 120+ countries, to PayPal launching its own stablecoin, fintechs aren't waiting on banks to launch these products.
• Market infrastructure is going digital — Visa, Mastercard, SWIFT, and central banks are piloting blockchain settlement and tokenized markets.

For Saudi Arabia, this global inflection point aligns with Vision 2030’s mandate to build a competitive, innovative financial sector. The Kingdom has a rare advantage: it can learn from years of global experimentation, adopt only the proven use cases, and move faster by leveraging global best practice — including lessons from its own Gulf neighbours.

The question is no longer if Saudi banks will engage with virtual assets — it’s whether they will lead the charge or follow the pack.

Global and regional adoption is set to accelerate, driven by:

1. Regulatory clarity in major markets — and in the Gulf. Over the past 18 months, we’ve seen major jurisdictions start to set clearer rules for digital assets. In the US, the recently passed GENIUS Act provides a licensing framework for the use of stablecoins in payments. The EU’s MiCA regulation, which took effect last year, brings clarity to the custody and trading of virtual assets in the Single Market. Closer to home, the Central Bank of Bahrain recently issued a regulatory framework for stablecoins and Qatar Central Bank issued DLT guidelines for banks. These moves mean that Gulf banks will increasingly compete in a regional market where neighbours are already laying down clear rules — a competitive pressure Saudi banks can’t ignore.
2. Customer demand for instant, seamless cross-border payments. Corporate treasurers, SMEs, and retail customers increasingly expect payments to work like sending an email: instant, low-cost, and available 24/7. This is especially relevant for cross-border trade, where legacy correspondent banking can be slow and expensive. In Saudi Arabia, Vision 2030 is accelerating e-commerce, tourism, and SME exports — all of which benefit from better international payment rails. This isn’t just theory. The Central Bank of the UAE recently announced it will launch a national CBDC for both wholesale and retail use, explicitly targeting faster domestic settlement and cross-border corridors with other partners. When a Gulf neighbour can settle payments instantly across borders, Saudi customers will expect the same. If banks don’t deliver, others will.
3. Fintechs aren’t waiting.Fintech players are already building and launching virtual asset services. Stripe recently introduced crypto payouts to 120+ countries, allowing platforms to pay freelancers and creators in USDC. Coinbase expanded its commercial offering to include USDC settlements for merchants and instant cross-border transfers via blockchain rails. Even PayPal launched PYUSD, its own regulated USD stablecoin, integrated directly into its payments app.
4. Central banks and incumbents are going on-chain. It’s not just startups. The Hong Kong Monetary Authority (HKMA) Project Ensemble is set to establish the city as a leader in tokenization and blockchain-based financial markets. In a similar vein, the Monetary Authority of Singapore (MAS) is running Project Guardian to explore tokenized assets with major banks. Together with the UAE's CBDC announcement, Saudi banks can see that these aren’t distant case studies — they’re next door.

How KSA banks can prepare

1. Know your assets. Develop a clear taxonomy of virtual assets: tokenized deposits, CBDCs, stablecoins, tokenized securities. Understand their use cases, operational requirements, and regulatory implications. For example, tokenized deposits may streamline wholesale settlement, stablecoins could power faster remittances, and tokenized securities may open new capital market opportunities.
2. Educate internally. Virtual assets touch the heart of banking: recording and transferring value. This means banking adoption will require multiple lines of business including innovation, payments, treasury, compliance, risk, legal, and more. Internal education isn’t just “nice to have” — it’s essential for avoiding missteps and enabling cross-functional collaboration on secure, value-adding products.
3. Start with proven wins. Look at what’s already delivering value globally. JPMorgan’s Kinexys platform is enabling same-day cross-border payments for corporates using blockchain settlement. HSBC’s Orion platform has issued digital bonds for real clients, cutting issuance timelines. Even without launching your own stablecoin, offering clients the ability to send and redeem regulated USD stablecoins like USDC or PYUSD can capture FX spreads, attract international SMEs, and build new payment revenue lines. Certain platforms in the US and beyond are also using blockchain infrastructure to facilitate repo transactions. Something I recently saw first-hand leading an experimentation between Saudi banks.
4. Work with the regulator. Saudi’s virtual asset framework is still evolving. Banks that engage early, share pilots and lessons, and identify high-value, safe use cases will help shape a regulatory environment that supports innovation while protecting stability. This is a two-way street: banks need regulators’ clarity to launch, and regulators need banks’ real-world input to refine policy.

Bottom line: The inflection point is here. Those who move early will shape the market, set the standards, and capture the upside. The choice for KSA banks isn’t whether to engage with virtual assets — it’s whether to lead or follow.