Stablecoin issuer / redeemer in Saudi Arabia
Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.
Stablecoin issuer is not permitted in Saudi Arabia.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- General AML/CFT obligations apply under Royal Decree M/20, with transaction reporting requirements — but no crypto-specific AML framework exists.
- If attempted via the SAMA Regulatory Sandbox, applicants must submit AML systems documentation as part of the preliminary application.
Key Restrictions
- Public crypto activities, including stablecoin issuance, are declared illegal/unlicensed by the 2018 Standing Committee declaration (SAMA/CMA/MOF).
- Virtual assets remain outside the legal framework per 2019 MOF warning.
- No standardized VASP or e-money license exists for stablecoin issuance; no licensed custodians or asset segregation rules apply.
- The only potential route — SAMA's Regulatory Sandbox — is experimental and does not guarantee full operational approval for retail stablecoin issuance.
- Foreign-issued stablecoins are not permitted for use locally.
Key Risks
- Legal enforcement risk: entities claiming to offer crypto services face legal action per SAMA warnings.
- Regulatory ambiguity: no framework for reserve composition, segregation, audit, or redemption rights exists.
- Sandbox-only pathway is narrow, time-limited (up to 1 year), and subject to ongoing compliance without a clear stablecoin-specific licensing outcome.
- Offshore custodial advice (e.g., UAE/Bahrain) indicates regulators expect local crypto to be held outside the jurisdiction.
- PR and reputational risk of operating in a jurisdiction where public authorities have repeatedly declared virtual assets illegal.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Custodial License Requirements: None exist, as no licenses are issued for cryptocurrency practices; entities claiming otherwise face legal action.
Segregation of Client Assets Rules: No rules apply, given the absence of recognized crypto custody services.
No standardized licenses: There is no broadly public VASP (Virtual Asset Service Provider) or crypto-specific license for retail exchanges, custody, or payment processing; activities like crypto trading, wallet services, or brokerage fall outside approved perimeters without explicit regulatory approval.
Limited permitted activities: Under SAMA's 2023 Payment Service Provider Regulations (enabled by the 2022 Law of Payments and Payment Providers), related services such as digital banking, electronic payment processing, P2P lending/investment, asset/wealth investment, crypto/blockchain applications, and BNPL may qualify indirectly, but not pure crypto trading or custody.
Exchanges and custody: Require entry via SAMA's Regulatory Sandbox as the primary (and currently only recognized) route for testing and potential approval; full operations demand ongoing compliance verification.
2018 Standing Committee Declaration (via SAMA/CMA): Virtual assets illegal/unlicensed.
2018 Standing Committee declaration (SAMA/CMA/MOF): Virtual currencies illegal. (https://www.lightspark.com/knowledge/is-crypto-legal-in-saudi-arabia)
SAMA warnings against Bitcoin (ongoing): No oversight or support. (https://zipmex.com/blog/is-crypto-mining-legal-in-saudi-arabia/) ; (https://freemanlaw.com/cryptocurrency/saudi-arabia/)
MOF 2019 warning: Outside legal framework. (https://timesofindia.indiatimes.com/world/middle-east/saudis-bitcoin-trading-laws-2025-what-traders-and-businesses-need-to-know/articleshow/124017628.cms)
Royal Decree M/20 (AML/CFT): General transaction reporting. (https://zipmex.com/blog/is-crypto-mining-legal-in-saudi-arabia/)
Submit preliminary application to SAMA Regulatory Sandbox electronically (full documentation on solvency, audits, AML systems, business model).
Undergo review/testing (up to 1 year); meet ongoing reporting, security, and client protection standards.
Post-sandbox: Secure full operational approval; continuous audits required.
Asset segregation rules: No rules apply, as crypto custody lacks regulation; institutional players are advised to use offshore custodians in jurisdictions like UAE or Bahrain.
Insurance requirements: None specified, given the lack of a custody framework. [1-7]
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Not permitted — stablecoin issuance to the public is illegal under Saudi Arabia's 2018 Standing Committee declaration and subsequent official warnings; no e-money, banking, or VASP licensing framework exists for this activity, and the SAMA Regulatory Sandbox does not provide a viable path for retail stablecoin issuance.
Questions this verdict aims to answer
- What e-money or banking license is required to issue?
- What reserve composition, segregation, and audit rules apply?
- What redemption rights must be granted to holders?
- Are foreign-issued stablecoins permitted for use locally?