WASHINGTON: President Joe Biden on Wednesday signed an executive order on government oversight of cryptocurrency that urges the Federal Reserve to explore whether the central bank should jump in and create its own digital currency.
The Biden administration views the explosive popularity of cryptocurrency as an opportunity to examine the risks and benefits of digital assets, said a senior administration official who previewed the order Tuesday on the condition of anonymity, terms set by the White House.
Under the executive order, Biden also has directed the Treasury Department and other federal agencies to study the impact of cryptocurrency on financial stability and national security.
Brian Deese and Jake Sullivan, Biden’s top economic and national security advisers, respectively, said the order establishes the first comprehensive federal digital assets strategy for the United States.
“That will help position the US to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad, in a way that protects consumers, is consistent with our democratic values and advances US global competitiveness,” Deese and Sullivan said Wednesday in a joint statement.
The action comes as lawmakers and administration officials are increasingly voicing concern that Russia may be using cryptocurrency to avoid the impact of sanctions imposed on its banks, oligarchs and oil industry due to the invasion of Ukraine.
Last week, Democratic Sens. Elizabeth Warren, Mark Warner, and Jack Reed asked the Treasury Department to provide information on how it intends to inhibit cryptocurrency use for sanctions evasion.
The Biden administration has argued that Russia won’t be able to make up for the loss of US and European business by turning to cryptocurrency. Officials said the Democratic president’s order had been in the works for months before Russia’s Vladimir Putin invaded Ukraine last month.
Daleep Singh, a deputy national security and economic adviser to Biden, told CNN on Wednesday that “crypto’s really not a workaround for our sanctions.”
The executive order had been widely anticipated by the finance industry, crypto traders, speculators and lawmakers who have compared the cryptocurrency market to the Wild West.
Despite the risks, the government said, surveys show that roughly 16 percent of adult Americans — or 40 million people — have invested in cryptocurrencies, and 43 percent of men age 18-29 have put their money into cryptocurrency.
Coinbase Global Inc., the largest cryptocurrency exchange in the United States, said the company had not seen a recent surge in sanctions evasion activity.
Treasury Secretary Janet Yellen said last week that “many participants in the cryptocurrency networks are subjected to anti-money laundering sanctions” and that the industry is not “completely one where things can be evaded.”
As for the Federal Reserve getting involved with digital assets, the central bank issued a paper in January that said a digital currency “would best serve the needs” of the country through a model in which banks or payment firms create accounts or digital wallets.
Some participants in digital currency welcome the idea of more government involvement with crypto.
Adam Zarazinski, CEO of Inca Digital, a crypto data company that does work for several federal agencies, said the order presents the opportunity to provide “new approaches to finance.”
“The US has an interest in growing financial innovation,” Zarazinksi said. He added that China and Russia were looking at crypto and building their own currency. More than 100 countries have begun or are piloting their own digital sovereign currency, according to the White House.
Katherine Dowling, general counsel for Bitwise Asset Management, a cryptocurrency asset management firm, said an executive order that provides more legal clarity on government oversight would be “a long term positive for crypto.”
But Hilary Allen, a financial regulation professor at American University, cautioned against moving too fast to embrace cryptocurrencies.
“I think crypto is a place where we should be putting the brakes on this innovation until it’s better understood,” she said. “As crypto becomes more integrated into our financial system it creates vulnerabilities not just to those who are investing in crypto but for everybody who participates in our economy.”
On Tuesday, the Treasury Department said its financial literacy arm would work to develop consumer-friendly materials to help people “make informed choices about digital assets.”
“History has shown that, without adequate safeguards, forms of private money have the potential to pose risks to consumers and the financial system,” said Nellie Liang, undersecretary for domestic finance.
Biden signs order on cryptocurrency as its use explodes
https://arab.news/v27am
Biden signs order on cryptocurrency as its use explodes
Saudi Arabia’s PIF completes $7bn inaugural murabaha credit facility
- Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions
- Facility builds on PIF’s recent success with sukuk issuances over the past two years
RIYADH: Saudi Arabia’s Public Investment Fund has completed its inaugural murabaha credit facility worth $7 billion, as part of its medium-term capital-raising strategy.
The Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions, according to a press release.
A murabaha credit facility is a financing structure compliant with Islamic principles, where the lender purchases an asset and sells it to the borrower at an agreed profit margin, allowing repayment in installments. This structure avoids interest, adhering to Shariah laws.
“This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia,” said Fahad Al-Saif, PIF’s head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division.
The facility builds on PIF’s recent success with sukuk issuances over the past two years, further bolstering its financial strength and commitment to best practices in debt management.
Rated Aa3 by Moody’s and A+ by Fitch, both with stable outlooks, PIF continues to solidify its position as a global financial powerhouse.
The fund’s capital structure is supported by four main funding sources, including contributions from the Saudi government, asset transfers, retained investment earnings, and financing through loans and debt instruments.
PIF’s strategy focuses on financing initiatives that contribute to economic growth in Saudi Arabia and internationally.
The $7 billion murabaha credit facility is expected to bolster PIF’s liquidity, supporting its investments both locally and globally.
By diversifying its funding sources through a Shariah-compliant structure, PIF looks to enhance its financial partnerships while complementing its existing financing tools, such as sukuk issuances.
This aligns with its medium-term capital strategy, ensuring flexibility, competitive financing terms, and risk mitigation.
Earlier in January, the National Debt Management Center also secured a Shariah-compliant revolving credit facility worth SR9.4 billion ($2.5 billion).
The three-year facility, supported by three regional and international financial institutions, is designed to meet the Kingdom’s general budgetary requirements.
Aligned with Saudi Arabia’s medium-term public debt strategy, the arrangement focuses on diversifying funding sources to meet financing needs at competitive terms.
It also adheres to robust risk management frameworks and the Kingdom’s approved annual borrowing plan.
PIF has been actively engaging in credit arrangements to support its investment initiatives and the Kingdom’s Vision 2030 economic diversification plan.
In August 2024, PIF secured a $15 billion revolving credit facility for general corporate purposes, replacing a similar facility agreed upon in 2021.
In addition to the revolving credit facility, PIF has diversified its financing instruments by issuing a $2 billion seven-year Islamic sukuk earlier in 2024 and planning to issue bonds in pounds sterling.
These efforts are part of PIF’s strategy to leverage a variety of funding sources to support its expansive investment activities.
Closing Bell: Saudi main market gains to close at 12,105 points
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Monday, gaining 34.87 points, or 0.29 percent, to close at 12,104.69.
The total trading turnover of the benchmark index was SR6.43 billion ($1.71 billion), as 137 of the listed stocks advanced, while 94 retreated.
The MSCI Tadawul Index also increased by 1.07 points, or 0.07 percent, to close at 1,510.91.
The Kingdom’s parallel market Nomu dropped, losing 190.29 points, or 0.61 percent, to close at 30,864.09. This comes as 36 of the listed stocks advanced, while 43 retreated.
Al Majed Oud Co. was the best-performing stock of the day, with its share price surging by 5.62 percent to SR158.
Other top performers included SAL Saudi Logistics Services Co., which saw its share price rise by 5.42 percent to SR276, and Riyadh Cables Group Co., which saw a 5.17 percent increase to SR158.80.
Al Mawarid Manpower Co. and Astra Industrial Group also saw a positive change, with their share prices surging by 5.17 percent and 5.05 percent to SR114 and SR195.40, respectively.
United International Holding Co. saw the steepest decline of the day, with its share price easing 2.45 percent to close at SR183.40.
Zamil Industrial Investment Co. and Nayifat Finance Co. both recorded falls, with their shares slipping 2.43 percent and 2.43 percent to SR36.15 and SR14.44, respectively.
National Co. for Learning and Education and Saudi Electricity Co. also faced losses in today’s session, with their share prices dipping 2.27 percent and 2.25 percent to SR197.80 and SR16.54, respectively.
On the announcement front, the Saudi Exchange announced the listing and trading of shares for Almoosa Health Co. on the main market starting Jan. 7.
During the first three days of trading, daily price fluctuation limits will be set at plus or minus 30 percent, while static price fluctuation limits will also apply.
From the fourth trading day onward, the daily fluctuation limits will revert to plus or minus 10 percent, and the static limits will no longer be enforced.
In a separate development, Almujtama Alraida Medical Co. announced the signing of a credit facility agreement with Alinma Bank worth SR45 million.
Alinma Bank saw a 0.17 percent decrease in its share price on Monday to settle at SR29.90.
The financing package includes an SR35 million revolving facility aimed at purchasing goods and an SR10 million revolving facility for capital expenditures.
The credit facilities have a duration of three years and are secured by a promissory note. The objective of the financing is to support working capital requirements and fund capital expenditures, the company stated.
Meanwhile, Mufeed Co. revealed the awarding of an SR41.5 million project focused on the development of concept, content, and execution of events aimed at reviving the Kingdom’s cultural and historical heritage.
The contract, which is set to be signed on Jan. 20, will involve a legal entity as the counterparty.
The project entails organizing unique activities designed to showcase and enhance the Kingdom’s rich historical and cultural narratives.
Mufeed Co. saw a 2.93 percent increase in its share price by the close of Monday’s trading session to reach SR73.80.
Saudi Arabia’s expat remittances up 19% to $3.21bn: SAMA
RIYADH: Expatriate remittances from Saudi Arabia rose to SR12.03 billion ($3.21 billion) in November, marking an 18.73 percent increase compared to the same month of 2023, new data showed.
Figures from the Kingdom’s central bank, also known as SAMA, indicated that remittances sent abroad by Saudi nationals totaled SR6.17 billion, reflecting a 22.71 percent increase during this period.
Saudi Arabia rising remittance flows underscore its growing prominence as a global economic hub and a premier destination for expatriate workers.
According to the latest Saudi government census released in May 2023, expatriates comprise 41.6 percent of the Kingdom’s population. Among the largest expatriate communities are 2.12 million Bangladeshi nationals, followed by 1.88 million Indians and 1.81 million Pakistanis.
These sizable populations highlight the scale of remittance transfers from the Kingdom, driven by competitive salaries, tax-free income, and comprehensive employee benefits.
This dynamic has positioned Saudi Arabia as a major contributor to remittance-dependent economies, supporting millions of families in South Asia, the Middle East, and Africa.
The Kingdom ranked second in the 2024 InterNations Working Abroad Index, reflecting its appeal to professionals across sectors such as finance, health care, and technology.
The Vision 2030 initiative, aimed at diversifying the economy and boosting investment, has spurred unprecedented growth in job opportunities, particularly as new industries emerge and existing sectors expand.
Expatriates in Saudi Arabia often benefit from attractive compensation packages that include housing allowances, health insurance, children’s education funding, and annual flights home.
With limited personal living expenses and no income tax, expatriates enjoy significant disposable income, enabling them to remit substantial amounts to their home countries.
According to World Bank data, the Kingdom ranks among the most affordable countries for remittance transfers, thanks to competitive fees and streamlined processes.
Digitalization is reshaping how remittances are managed, further enhancing efficiency and accessibility. Saudi Arabia’s fintech landscape, buoyed by the Vision 2030 Financial Sector Development Program, has introduced a range of innovations.
Mobile banking apps, online payment gateways, and partnerships with global remittance platforms have simplified transactions. Services such as the Saudi Payments Network, or Mada, and the adoption of blockchain technology by local banks have improved transfer security and speed.
Additionally, increased competition in financial services has driven down costs, making transfers more affordable compared to global standards.
The growing reliance on digital channels aligns with the Kingdom’s broader push toward a cashless economy. Remittance platforms integrated with mobile wallets and QR-based payments have democratized financial access, especially for lower-income workers.
As Saudi Arabia continues to implement Vision 2030’s transformative agenda, remittance flows are expected to remain robust.
The Kingdom’s focus on diversifying its economy, creating a business-friendly environment, and investing in technology will likely attract even more expatriates.
With stronger remittance infrastructure and growing digital adoption, the ease, affordability, and volume of transfers will further enhance the global economic impact of expatriate labor in Saudi Arabia.
Saudi Arabia’s e-commerce sector sees 10% growth, official figures reveal
RIYADH: Saudi Arabia’s e-commerce sector saw its upward momentum continue in the fourth quarter of 2024, with 40,953 businesses now registered across the Kingdom— a 10 percent increase year on year.
The latest data from the Ministry of Commerce revealed that Riyadh led with 16,834 registrations, followed by Makkah with 10,314, and Eastern Province with 6,488. In the Madinah and Qassim regions, e-commerce enrollments reached 1,952 and 1,324, respectively.
The growth falls in line with Saudi Arabia’s ongoing transition toward a diversified, digitally-driven economy, with e-commerce playing a crucial role. The Kingdom now ranks among the top 10 countries globally in expansion of this sector.
These figures align with the nation’s goal to increase modern commerce and e-commerce’s share of the retail sector to 80 percent by 2030, as well as the government’s aspiration to raise online payments to 70 percent by the same year.
The Ministry of Commerce’s latest quarterly report further revealed that the logistics sector recorded an 82 percent surge in the issuance of records in the fourth quarter compared to the same period of 2023 to reach 16,561 registrations.
The capital led the list with 8,074 registrations, followed by Makkah with 4,235 and Eastern Province with 2,038. The Madinah and Qassim regions recorded 486 enrollments each.
Regarding application development, the report showed that the sector witnessed a 36 percent year-on-year jump in the issuance of records to reach 15,775 registrations in the final quarter of 2024, compared to the corresponding quarter of 2023.
Riyadh topped the list with 9,647 registrations, followed by Makkah with 3,191 and the Eastern Province with 1,590.
The Kingdom’s fintech solutions sector also recorded a 12 percent year-on-year increase with the issuance of 3,152 records in the fourth quarter of 2024, compared to the same period a year earlier.
The bulletin also underscored significant growth across various promising sectors, aligning with Saudi Arabia’s Vision 2030 goals.
Notable expansions were observed in several key fields, including cloud computing services, manufacturing solar panels and their parts, and real estate activities.
Growth was also seen in organizing tourist trips, entertainment events, conferences, and trade fairs.
These developments reflect the Kingdom’s strategic focus on fostering innovation and sustainable growth across diverse industries.
The ministry’s quarterly business sector bulletin provides an overview of the latest developments in the nation’s commercial environment, highlighting Saudi Arabia’s economy’s continued growth and diversification.
Jordan’s total FDI reaches $1.3bn, reflecting strong investor confidence
RIYADH: Jordan’s foreign direct investment inflows rose 3.7 percent year on year in the third quarter of 2024, reaching $457.8 million, according to preliminary data from the balance of payments.
This figure represents 3.2 percent of the nation’s gross domestic product, reflecting sustained investor confidence despite economic headwinds in the region, the Jordan News Agency reported.
For the first nine months of 2024, total FDI inflows amounted to $1.3 billion, or 3.3 percent of GDP, slightly down from $1.6 billion in the same period of 2023.
However, the 2024 figure surpassed cumulative FDI levels seen in both 2021 and 2022, signaling long-term growth momentum.
While foreign investment in Jordan has traditionally focused on energy, tourism, real estate, manufacturing, and services, the country launched its Economic Modernization Vision in 2022 to boost growth. The plan targets $60 billion in investments and 1 million jobs over the next decade, with key sectors including ICT, health care, tourism, real estate, mining, and agriculture.
The latest data showed that Arab nations contributed nearly half of Jordan’s FDI inflows in the first three quarters of 2024, accounting for 49.1 percent. Among these, Gulf Cooperation Council countries led with 31.7 percent.
EU nations accounted for 11.5 percent, with the Netherlands and France contributing 4.9 percent and 3.5 percent, respectively.
Non-Arab Asian countries made up 7.2 percent, led by China at 2.5 percent and followed by India at 2.1 percent. The remaining 32.2 percent came from various global regions.
The financial and insurance sector was the top recipient of FDI, attracting 15.7 percent of total inflows. Manufacturing attracted 7.7 percent, followed by information and communication with 7.5 percent, mining and quarrying at 7.3 percent, and transportation and storage at 7.0 percent. Wholesale and retail trade accounted for 6.1 percent.
Notably, real estate and land investments by non-Jordanian individuals made up 14.9 percent of total FDI, highlighting the ongoing appeal of Jordan’s property market.
Jordan’s strong FDI performance reflects its strategic efforts to enhance its investment climate and capitalize on its position as a regional business hub.
Economic experts projected Jordan’s growth to range between 2.5 percent and 3 percent in 2025, driven by an improved business environment and increased investments, according to the Jordan News Agency report last month.
This aligns with the country’s average growth rate of 2.5 percent over the past decade, as reported by the World Bank, providing a solid foundation for expansion.
Recent government measures, such as reducing penalties for unlicensed vehicles and offering tax cuts for electric cars, aim to boost financial and social stability, addressing economic challenges and attracting further investment.
