RIYADH: The value of virtual asset transactions in Saudi Arabia was worth around $20 billion with over 800,000 Saudis using digital currencies last year, according to the managing director of trading platform BitOasis in the Kingdom, Ali Alobaid.
He told Arab News: “We believe that this can grow by five times over the next five years. Last year, KSA probably represented 15 percent of Gulf Cooperation Council and Middle East and North Africa activity.”
Alobaid joined BitOasis, a leading crypto trading platform operating in seven countries across the MENA region, as managing director for the Kingdom this year, following other roles in the payments and fintech space in the country.
By the end of the year across MENA, about 4 percent of the adult population will have
invested in crypto-currencies, says Ali Alobaid, Managing director of BitOasis in KSA
The executive added: “In terms of demographics, our user base in the Kingdom is primarily made up of millennials. More specifically, close to 45 percent of all trading activity on BitOasis is driven by 25-34-year-olds, while another 30 percent is driven by 35- 44-year-olds.”
He expected cryptocurrency use in the MENA to grow quickly over the next few years.
FASTFACTS
• BitOasis introduced a swap feature on its core platform last month, which allows users to simply buy cryptocurrencies with other digital coins.
• The platform also has a partnership with UK-based online payment firm Checkout.com, which makes it easier for users to transfer funds and ‘reduces friction.’
The BitOasis MD added: “We are still at an early stage in the region’s journey toward mass adoption of virtual assets or cryptocurrency. We estimate that by the end of the year across MENA, about 4 percent of the adult population will have invested in crypto-currencies. In the US the number is about 20 percent.”
He also expected this type of currency will be embraced more by a younger, tech-savvy, generation.
Alobaid said: “We do expect markets that are characterized by young, tech-savvy early adopters that are keen to get exposure to a diversity of investable assets, where nations such as Saudi Arabia, will witness accelerating adoption and growth in the next few years. The adoption of these assets in the MENA region grew by 15 times between July 2020 to June 2021 — twice the global average. The Kingdom is one of the fastest growing markets for crypto-adoption in the MENA region.”
BitOasis, which launched in 2015, allows retail and institutional investors across the region to buy, hold, and sell over 40 virtual assets or cryptocurrencies.
Alobaid said: “We offer trading pairs in the UAE dirhams and the Saudi riyals and provide Arabic-language customer support. We generate revenues from the commissions we charge on buying and selling just like an exchange or brokerage platform that operates with shares or other assets.”
However, BitOasis does not enable peer-to-peer trading of virtual assets on its platform.
Alobaid added: “Such activity is more likely to lead to frauds and scams. It’s simply not in the consumer’s interest, and that includes Saudi residents, to allow such trading. There is also a lack of supervision from a regulatory perspective. Our advice would always be to use a supervised centralized platform for trading activity.”
He added BitOasis introduced a swap feature on its core platform last month, which allows users to simply buy cryptocurrencies with other digital coins.
Alobaid said: “Our core platform allows retail users to track and manage their crypto portfolio without the complexity of going through a sophisticated trading experience. With the new feature, core users can now swap a chosen percentage of bitcoin, ethereum or other crypto assets in their existing portfolio with another, in a few clicks. Users also have full visibility on conversion rates in real-time as they start and execute a swap transaction.”
Alobaid said the platform also has a partnership with UK-based online payment firm Checkout.com, which makes it easier for users to transfer funds and “reduces friction.”
Alobaid expects cryptocurrencies will be gradually regulated over the next two years.
He said: “We currently have the Central Bank of Bahrain, the Abu Dhabi Global Market, and the Dubai World Trade Center that regulate virtual asset activity. The Emirates Securities and Commodities Authority has indicated that they intend to launch a framework for the UAE.”
He added: “This will further drive consumer protection, foreign investment, and innovation and ensure that the region develops its own relevant use-cases around Web 3.0 (blockchain-based) technologies.”
Alobaid is well aware of the debate about the volatility of digital coins, but maintains they are a useful asset class.
He said: “It is true that virtual assets are subject to volatility, not unlike many financial assets, however, over the long-term investors in virtual assets have reaped significant gains.”
The platform head added: “Virtual assets are another type of investable asset class and one that has increased in popularity globally over the last decade. Today the market cap of virtual assets is approximately $2 trillion against $12 trillion for gold. Investors can diversify their portfolios, which today may consist of stocks, or real estate, along with virtual assets to achieve diversification.”
