Saudi Arabia has received requests for three new banking licences that are in advanced stages of processing and the kingdom's regulator is exploring the introduction of cryptocurrencies, the country's central bank governor said.
The Saudi Arabian Monetary Authority (Sama), the country's central bank, also ruled out the possibility of bank mergers among local lenders, Asharq Al-Awsat, based in London, reported, citing its governor Ahmed Alkholifey.
Sama is undertaking a pilot project to issue a cryptocurrency that will be restricted to banks to stay up to date with the latest technologies and practices, the Saudi-owned newspaper reported, citing deputy governor for banking operations Hashem Alhekail. After the conclusion of the pilot project, Sama will study the possibility of expanding the introduction of cryptocurrencies if the studies reap positive results.
Saudi Arabia, the biggest Arab economy, has 26 banks, including 14 branches of foreign banks such as UAE's Emirate NBD, Germany's Deutsche Bank, JP Morgan Chase and France's BNP Paribas.
Citibank is in advanced discussions for a banking licence in Saudi Arabia as it seeks to return after a more than 10-year absence from the country, Bloomberg reported in February.
Switzerland's Credit Suisse is also seeking a banking licence, Reuters reported in May. Financial institutions are seeking a larger share of the country's financial industry as the kingdom prepares to sell a 5 per cent stake in state-owned Saudi Aramco, which is expected to raise US$100 billion and become the world's biggest initial public offering.
Goldman Sachs is also exploring the possibility of gaining a licence from market regulator the Capital Market Authority to conduct share sales and trading in Saudi Arabia, Reuters reported in May.
In contrast, speaking at an investor conference in New York last month, Jamie Dimon, the chief executive of JP Morgan Chase said bitcoin "is a fraud" and unreliable with an uncertain future.
Emirates NBD, Dubai's biggest bank by assets, is looking to expand its presence in Saudi Arabia and plans to approach the banking regulator next year to seek permission for 20 additional branches in the kingdom, its chief executive said last month.