Blockchain technology and Smart Contracts are gaining popularity in many countries, and Saudi Arabia is not an exception. The technology uses digital ledgers, which then use cryptography to verify transactions and cryptocurrency as the medium of exchange. The smart contract, like blockchains, also involves the use of the internet to conclude and sign contracts. The two technologies have a vast potential to bring transformative changes in Islamic finance, especially in Saudi Arabia. Blockchain technology is important because it has an easier money transfer and transaction processing procedure. As such, it enables faster transactions between individuals or entities, especially in the financial and banking sector. The blockchain technology also allows people to view items accurately and in real time, which makes it a cheaper but efficient technology. Blockchain technology is also useful in other sectors of the economy. Some governments use technology for digital identification. Again, the data entered in the blockchain cannot be changed. This makes the technology applicable in combating fraudulent transactions. As such, it can facilitate easy and smooth transactions in financial and real assets. The biggest advantage of the method is that it has eradicated the archaic paperwork tradition, which wastes time, space, and money.
Blockchain technology in Saudi Arabia brings a chance to revolutionize Saudi Arabia’s economy. The ease of transactions and records, coupled with the higher security against fraud, makes this technology a favorable tool for vision 2030. It will promote business and investment in the country and boost the financial industry largely. Again, it will create numerous employment opportunities for communications and computer experts within the country. Consequently, Saudi Arabia’s economy will grow fast, with the adoption of this impressive technology. The Kingdom can also utilize the technology to store and safeguard digital identification methods, which will be essential for the country’s security. Blockchain technology will also support other Fintech businesses within the country and boost the financial sector.
Smart contracts, on the other hand, are computer protocols that facilitate the enforcement and verification of contracts. The good thing with the smart contract is that there can be a contract without engaging a third party. The protocol also ensures that the transactions are irreversible and can be tracked at any time. Smart contracts aim at providing superior security in contracts than traditional methods can. The program also reduces the costs of the transaction, and the times used while filing such contracts. Like the blockchain technology, most of the smart contracts use cryptocurrency as the medium of exchange. The technology will be vital to Saudi Arabia in various ways. It will allow easier and faster transactions, which will boost the business environment and consequently increase the economic growth in the country.
One important thing to note about blockchains and smart contracts services is that they are safer, unlike other methods of Fintech. The two programs ensure the security of a transaction and facilitate its trackability. In this regard, they can make the financial environment safer. While Saudi’s government has been hesitant to adopt the new ledge technologies, it slowly appreciates the technology. The SAMA is responsible for licensing smart contract and blockchain companies. For example, the SAMA and the KSA signed a contract with the Ripple Company to facilitate the xCurrent program, which is a smart contract method that facilitates payments across the border. The gradual acceptance of the blockchain and smart contracts will level the country with other developed economies.