Saudi Arabia’s Finance Minister Mohammed al-Jadaan highlighted the importance of regulating new technology to ensure financial systems across the globe remain stable, at the World Economic Forum on Tuesday.
Al-Jadaan was part of a panel at the Davos-based conference that looked at how countries financial institutions, such as banks, could fight against global economic shocks while making sure they continue to advance technology in the sector.
“Obviously we will need space for innovators. But it will need to be regulated or it could put a risk on financial stability and societies,” al-Jadaan said.
Virtual asset exchange FTX made headlines last year when it filed for bankruptcy in November and US prosecutors accused founder Sam Bankman-Fried of orchestrating an “epic” fraud that may have cost investors, customers and lenders billions of dollars, drawing attention to the need to regulate technology such as blockchain – which processes crypto payments.
“There is obviously a legitimate concern and need both within the private sector, innovators, conventional financial institutions and disruptors,” al-Jadaan said on the panel.
“There’s a genuine concern with the regulatory sides. Both [the private sector and regulators] need to be understood and need to work together,” he said.
The Saudi Finance Minister also said that he thinks if a central bank digital currency – CBDC – were to be introduced it could be risky because people would have to give a lot of data away for the system to work.
A CBDC is digital or electronic and comes in the form of an amount on a computer of similar device.
Saudi Arabia is currently diversifying its economy as part of its Vision 2030 by reducing its dependance on oil revenues. As part of these plans, the Kingdom is investing heavily in gaming and the e-sports industries, as well as the development of futuristic city NEOM.
Despite countries dealing with global economic shocks such as rising food prices as a result of the Russia-Ukraine war, the Kingdom leads the IMF world economic growth outlook projections for 2023 out of all Middle Eastern and Central Asian countries. Another IMF report said that Saudi Arabia was likely to have been one of the world’s fastest growing economies in 2022.