The move comes at a time as the kingdom is witnessing economic contraction due to depleting oil prices and the coronavirus pandemic.

In a report tabled before the B20 group and the Business at OECD, Saudi Arabian business leaders proposed a business passport that allows businesses to participate in the global value chain (GVC).

The report stated, “A GVC Passport could provide an authenticated, authoritative, verifiable financial fingerprint of a given entity, enabling it to operate within GVCs without the need to reproduce the same documentation on multiple occasions, nor undergoing duplicative verifications.”

“In many countries, excessive and overly complex regulation creates legal uncertainty, and the variety of rules imposes cumulative burden on firms, exacerbated by inconsistent cross-border implementation of policies, regulation and compliance regimes; generating, at best, the dispersion of effort and, at its worst, negative unintended consequences.”

Over the years, Saudi Arabia has increased its investment when it comes to blockchain technology. Notably, in June, the kingdom’s central bank pumped part of its $13 billion liquidity injection to the local banks through a blockchain platform.

The central bank said in a statement, “This action comes as a part of SAMA continues its efforts in exploring and experimenting with emerging technologies and keeping lead pace with the global trends of central banks in assessing the impacts of such technologies on the financial sector.”

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Saudi Arabia announced that it will inject around $13.3 billion into its banking sector to help it weather the coronavirus pandemic. The Saudi Arabian Monetary Authority (SAMA) has been supporting local banks as they seek to resume normal operations following the COVID-19 pandemic.

Recently, Saudi Arabia pumped the $13.3 billion into its banking sector by using blockchain technology.

In a statement, SAMA said, “This action comes as a part of SAMA’s continues efforts in exploring and experimenting with emerging technologies and keeping lead pace with the global trends of central banks in assessing the impacts of such technologies on the financial sector.”

Michael O’Loughlin, a financial expert and Forbes contributor believes the use of blockchain is a huge step in the right direction for SAMA as central banks around the world are engaging in blockchain-related research.

“Blockchain technology if implemented properly has the potential to improve banking operations significantly,” he told the media.  Blockchain can lead to increased security, optimise the ability to track and trace money, and also efficiency in the banking sector.

Reduced fraud, increased security and quick and hassle-free transactions are what banks want, customers want the same thing too. Blockchain promises to deliver just that, after 10 years of proofs of concept, the world is ready to see financial services embrace the tech” O’Loughlin added.

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