Summarized Understanding Saudi Arabia’s Latest Move in the Rise of Cryptocurrencies in Arab Countries.
As cryptocurrencies become more popular in the Arab world, analysts are looking at how Saudi Arabia’s plan to join China’s BRICS bank could affect the diversification of the kingdom’s financial environment.
Saudi Arabia is in discussions to become a member of the Shanghai-based lender, which was established by the world’s largest developing economies, the so-called BRICS countries that include Brazil, Russia, India, China, and South Africa, according to The Financial Times.
If Riyadh were to gain access to the New Development Bank, it would open up new funding opportunities for the kingdom as an alternative to Western-dominated financial institutions. The talks on Saudi Arabia joining the bank as its ninth member come as the NDB is preparing to start a formal evaluation of its funding options. These have been thrown into question because of Russia’s ongoing military aggression against Ukraine.
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The Shanghai-based bank is holding its annual meeting today and on June 7.
The NDB, established in 2015, has lent over $33 billion to 96 projects in the five founding BRICS states. Since then, it has also accepted three additional developing countries as members: Bangladesh, Egypt, and the United Arab Emirates.
Saudi Arabian officials did not comment on the reported talks.
“The kingdom’s investigation into alternative financial systems is seen in the rumored negotiations between Saudi Arabia and the New Development Bank (NDB) of the BRICS. While obstacles still exist, a well-regulated and informed strategy can help unlock the promise of cryptocurrencies and support the economic development and stability of Arab countries,” wrote an analyst for the crypto-focused site Null TX.
When asked to comment on the status of the ongoing negotiations with Riyadh, the NDB said in a statement: “In the Middle East, we attach great importance to the Kingdom of Saudi Arabia and we are currently engaged in a qualified dialogue with them.”
Search for funds to finance activities
Ashwani Muthoo, the director-general of the NDB’s independent evaluation office, said that gaining access to additional fundraising options is “the most important thing at the moment” for the Shanghai-based bank. The official also admitted that the NDB is currently “struggling to mobilise resources” that are necessary to fund its lending activities.
“We will have to analyse the Russia situation, the war…these are the kinds of things we’ll have to look at,” according to Muthoo.
