Saudi Monetary Authority Pumped Some of $13B Bank Infusion Using Blockchain

The central bank claims to have distributed 'part' of a recent $13 billion bank "liquidity enhancement" using blockchain tech.

AccessTimeIconJun 9, 2020 at 9:00 a.m. UTC
Updated Sep 14, 2021 at 8:49 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Saudi Arabian Monetary Authority (SAMA) has distributed cash to local banks over blockchain.

On Monday, the central bank announced it had deposited “part” of a recent banking sector liquidity pump through “blockchain technology” after injecting 50 billion riyals ($13.3 billion) into local banks on June 1.

At the time, SAMA said banks maintained an average Liquidity Coverage Ratio (LCR) of 201%, meaning Saudi banks had more than enough cash on hand to cover short-term obligations.

The banking sector's average Capital Adequacy Ratio – essentially a measurement of financial soundness – was at 18.6%, placing the banks in line with the Kingdom’s longstanding target of between 18 and 20%.

SAMA did not disclose which banks received liquidity injections over blockchain or how much of the overall package SAMA had pumped across the blockchain. Furthermore, it did not state what blockchain platform it had used. 

The action appears to be the first case of SAMA providing liquidity via blockchain. It is not, however, the central bank’s first foray into blockchain tech. SAMA began trialing Ripple’s xCurrent for cross-border payments in 2018. 

A Ripple representative did not immediately answer questions regarding the company’s ongoing partnership status or whether xCurrent played a role in the SAMA liquidity pump.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.