Saudi Arabia's Hidden Crypto Market: The Overlooked Regional Growth Engine

City Overview: Riyadh | Country: Saudi Arabia | Metropolitan Population: 7.82 million | Founded: 1737 | Regional Status: Third-largest city in the Middle East

Rapid Growth in the Gray Area

Located in the heart of the Nafud Desert, Riyadh has long been underestimated in the cryptocurrency sector. This traditional oil hub city is experiencing a silent digital asset revolution.

Industry research shows that among Saudi residents aged 18 to 60, 14% hold cryptocurrency assets. The phenomenon behind this data is even more interesting—under an ambiguous environment where policies are neither explicitly supportive nor fully prohibitive, the number of crypto holders continues to grow rapidly. Morrad Irsane, CEO of the halal finance blockchain platform Takadao, has observed this trend and believes it indicates a potential breakout point for the regional crypto market.

Market Vitality Driven by Policy Ambiguity

Rather than taking a clear regulatory stance, Saudi authorities are adopting a “wait-and-see” approach. Several local industry insiders have revealed that the government is still in the learning phase and has not yet introduced mandatory policies. While banks generally remain cautious about crypto assets, this has not completely suppressed market activity.

A local finance student disclosed that about 20% of his classmates are holding or trading crypto assets. In the past, funds could flow relatively easily into trading ecosystems through traditional banking channels, but as regulatory attention increased, banks began restricting such transfers and even closing related accounts. This has led to peer-to-peer (P2P) trading becoming the mainstream method, involving both professional traders and ordinary investors.

It is noteworthy that Saudi Arabia does not levy personal income tax or capital gains tax, giving holders of crypto assets a clear cost advantage. To bypass banking restrictions, it has become common to use foreign currency accounts in neighboring countries like Bahrain for fund transfers.

Wealthy Families Enter the Market, Heating Up

According to industry insiders, large local wealth management firms and family offices in Saudi Arabia are also beginning to focus on crypto asset allocation. Due to the lack of official purchasing channels, these institutions participate indirectly in the market. The demand from high-net-worth clients is gradually boosting market activity and trading volume.

Web3 and Gaming: Subtle Shifts in Official Attitudes

At the 2023 External Edge Esports Expo in Riyadh, Saudi Prince Faisal bin Bandar, as Chairman of the Saudi Esports Federation, attended and delivered a speech, enthusiastically expressing optimism about the prospects of the gaming industry and virtual worlds. The prince’s high-profile appearance sent positive signals from the government.

Yat Siu, Chairman of Animoca Brands, stated on-site that Saudi Arabia’s strategic position in the Middle East is similar to China’s role in Asia—once officially involved in a sector, its influence will expand from the region to the global stage.

Subsequently, King Abdulaziz City for Science and Technology (KACST) reached a cooperation agreement with Animoca Brands to establish a Web3 innovation center in Riyadh, aimed at incubating local startups and supporting blockchain gaming research at universities. KACST officials said this move is intended to “change the development direction of blockchain and digital innovation in the region.”

This shift is not an isolated event. As early as 2020, Saudi Aramco (Saudi National Petroleum Company), along with other energy giants, invested $5 million in Vakt. Vakt simplifies processes by bringing commodity trading onto the blockchain, eliminating the paper-based procedures still prevalent in the oil industry.

Gaming Sector: A Key Pillar of the 2030 Vision

Game and virtual economy development has been incorporated into Saudi Arabia’s 2030 economic diversification vision. This strategic shift is especially attractive to young people, as Riyadh’s climate limits outdoor daytime activities. The integration of blockchain technology with the gaming industry is seen by officials as a natural evolution toward future innovative economies.

Regional Competition: Learners vs. Leaders

Riyadh faces competition from neighboring Dubai. Dubai has established itself as the regional hub for the Middle East’s crypto industry, quickly attracting global capital and talent through friendly policies. However, industry observers note that Saudi authorities are adopting a “cautious observation” strategy—allowing the innovation ecosystem to develop freely in a relatively relaxed environment while avoiding over-committing to policies.

Some local insiders even believe that the UAE’s rapid embrace of the industry is more of a “small country experiment,” while a larger country like Saudi Arabia can learn from its neighbor’s experience and develop a more robust long-term strategy. This differentiated positioning could ultimately become an advantage for Saudi Arabia—gaining innovation benefits while avoiding the risks of rushed decisions.

Ecosystem Taking Shape

As an emerging hub for the gaming industry, Riyadh has attracted several blockchain development companies and consulting firms, many serving international projects. The local entrepreneurial ecosystem has adopted a tolerant attitude toward these enterprises, as decision-makers understand the long-term value of innovation industries for the city’s development.

In fact, Saudi Arabia’s true potential in the cryptocurrency sector may lie precisely in its “sleeping giant” status—possessing ample capital, a large young population, and government strategic support, yet not fully committed. Once official policies are set, this market’s growth momentum could far exceed expectations.

Could Saudi Arabia become the next mainstream region for cryptocurrency adoption? The answer may be closer than we think.