Will Saudi Arabia Announce First Blockchain-Based Digital Government in November?

Will Saudi Arabia Announce First Digital Government in November?

All countries around the world plan to adopt the state-of-the-art blockchain technology. Thus, the governments that do not use the proper technology in their solutions would have no place in the digital world.

In November, Saudi Arabia, the world’s biggest oil exporter, is expected to announce the first digital government in the world, especially after the great efforts the kingdom exerted in this regard.

Undoubtedly, the Saudi government has made immense efforts in dealing with the topnotch blockchain technology. Therefore, it managed to secure advanced positions in using blockchain in several vital fields. But why November?

Historical Event

The whole world is anticipating the great event that will be hosted by the kingdom in November 2020. The world’s biggest oil exporter will host – for the first time in the history of the Arab world – the Group of Twenty (G20) which reflects the leading position secured by the kingdom and the considerable efforts exerted by the government in this regard.

On November 21-22, ministers and prominent figures representing 19 countries and the European Union will meet in Riyadh to discuss some issues, mainly the economic ones.

The G20 agenda includes 14 items, of which six are related to the blockchain and the associated technologies. This indicates that the world’s leaders pay great importance to this technology that may better change our life in the future.

Preparatory Events

The G20 preparatory events include more than 120 events (conferences, seminars or workshops) organized inside and outside the kingdom this year.

These events will be organized by eight groups such as the science group that is led by King Abdullah University of Science and Technology (KAUST).

This indicates that the kingdom seeks to be in the forefront of the technical and digital industries. In addition, the Saudi government aims to actively adopt topnotch technologies especially the Blockchain.

Previous Steps

The assumption that the kingdom can announce a digital government is never out of optimism or daydreams, but rather a fact preceded by evidence.

Recently, the kingdom has adopted the blockchain technology in many fields. It also used several auxiliary technologies such as artificial intelligence, the Internet of things and cyber security, all of which pour into the pot of digitization.

Saudi Arabia ranked first regionally and 13th globally in terms of commitment to cybersecurity in several fields, according to the classification of Oxford International Business Group.

#1 In Global Trade

Saudi Arabia considered the first country in the Middle East to use blockchain technology in global trade space, apart from banking industry. KSA government seeks building an integrated logistical platform in the transportation sector as well as support services.

Saudi Customs witnessed the arrival of the first shipment powered the blockchain technology in May 2019. The cargo departed King Abdul Aziz Port in Dammam bound for Rotterdam, Netherlands.

Government’s interest in adopting blockchain is due to the huge amount of global trade movement, 13%, that passes through the Kingdom’s coasts, and the benefits to it, especially with the Kingdom’s geographic location that links the continents of Asia, Europe and Africa.

On the other hand, HSBC Bahrain and Saudi British Bank (SABB) have for the first time used blockchain technology in Saudi Arabia and Bahrain to finance international trade. The transaction involved the shipment of homogenized aluminium billets from Aluminium Bahrain B.S.C. (Alba) to Saudi Arabia’s Altaiseer Aluminium Corporation (TALCO).

Financial Sector

The Saudi Arabian Monetary Authority (SAMA), the central bank for the Kingdom of Saudi Arabia (KSA), has signed an agreement with Ripple to help banks in the KSA improve their payments into and out of the country using blockchain-based platform, xCurrent, with greater transparency and lower costs by 10%.

According to Moody’s, the credit rating agency, this agreement will translate to savings of roughly $200-$400 million per year system-wide.

Oil and Gas

Saudi Aramco, state-controlled giant oil company, announced last month that it has invested in post-trade oil blockchain platform VAKT.

Aramco’s Energy Ventures (SAEV) subsidiary has bought shares worth $5 million in VAKT. The deal is aimed at financing the platform’s expansion, especially in the Asian market. Accordingly, SAEV has joined VAKT’s 12 shareholders which are among the world’s largest oil and commodity trading companies.  

Solar Energy

Saudi-based ACWA Power announced the move to adopt SolarCoin,  marking the first time a utility-scale generator joins the SolarCoin ecosystem. SolarCoin adoption will provide digital tokens to ACWA Power for every MWh of solar energy produced and will provide a supplementary means of payment for goods and services than conventional currency.

Telecoms

Saudi Telecom Company (STC) and ConsenSys have announced the launch of Blockchain on STC Cloud, a move set to accelerate Blockchain adoption in the Kingdom. It will provide enterprises and governments with a path to enable mass adoption of the technology through dramatically lowering the costs of prototyping and experimentation with Blockchain.

According to Brand Finance report for 2019, STC is the most valuable brand in the Middle East, among 50 best digital corporations in the world, and the first in Middle East.

Charity

Ministry of Interior’s Information Technology Department announced last month it would cooperate with Saudi Arabian Monetary Authority (SAMA), banks and Ministry of Justice in order to adopt blockchain technology in payments from outside the Kingdom for non-Saudis imprisoned for financial verdicts.

Accordingly, the step would allow transferring money for Enforcement Courts’ accounts, in order to be directly distributed to the right owners.

In Conclusion

A single report can’t elaborate Saudi Government efforts towards the digitization of its citizens life, as this requires many reports.

The aforementioned report is just a glimpse of some uses of blockchain to assert that the Kingdom is capable of introducing a fully digital government, even if it will take some effort from those who are welling to do whatever it takes to promote their country’s leading position among beers.

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