The Saudi Arabian Monetary Authority (SAMA) has distributed cash to local banks over blockchain.
On Monday, the central bank announced it had deposited “part” of a recent banking sector liquidity pump through “blockchain technology” after injecting 50 billion riyals ($13.3 billion) into local banks on June 1.
At the time, SAMA said banks maintained an average Liquidity Coverage Ratio (LCR) of 201%, meaning Saudi banks had more than enough cash on hand to cover short-term obligations.
The banking sector’s average Capital Adequacy Ratio – essentially a measurement of financial soundness – was at 18.6%, placing the banks in line with the Kingdom’s longstanding target of between 18 and 20%.
SAMA did not disclose which banks received liquidity injections over blockchain or how much of the overall package SAMA had pumped across the blockchain. Furthermore, it did not state what blockchain platform it had used.
The action appears to be the first case of SAMA providing liquidity via blockchain. It is not, however, the central bank’s first foray into blockchain tech. SAMA began trialing Ripple’s xCurrent for cross-border payments in 2018.
A Ripple representative did not immediately answer questions regarding the company’s ongoing partnership status or whether xCurrent played a role in the SAMA liquidity pump.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.