International Finance

Saudi Arabia considers introducing blockchain business passports

Saudi Arabia blockchain_IFM_Image
It will help the kingdom boost trade finance and cross-border trade

Saudi Arabia is considering introducing blockchain business passport in order to boost trade finance and cross-border trade, according to media reports.

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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