Saudi Awwal Bank (SAB) taps Chainlink to drive blockchain innovation

Saudi Awwal Bank (SAB) has entered a strategic agreement with Chainlink to strengthen its digital transformation agenda. The partnership brings to Saudi banking Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and Chainlink Runtime Environment (CRE), a step towards onchain financial services.

The CCIP facilitates secure cross-chain transfers of assets and data. This functionality bridges decentralized applications and traditional financial platforms, opening up the path for the seamless integration of tokenized assets, programmable contracts, and real-time settlement mechanisms.

CRE provides SAB with a developer-friendly platform for testing, building, and deploying next-generation banking tools reliably and securely. In a tweet on X, SAB noted, “This collaboration marks a pivotal step in our commitment to drive Financial Innovation in Saudi Arabia.”

Through these technologies, SAB has the ability to test new applications such as automated lending, tokenization of physical assets, and faster cross-border payments. Tokenization is relevant to financial markets, where stocks, bonds, and real estate can be digitally represented for easier and safer transactions. Smart contracts can also make loans and insurance contracts more efficient by automating the process and cutting down on paperwork and operational delay.

Chainlink aligns with Saudi Arabia’s vision 2030

The collaboration is in line with Saudi Arabia’s wider Vision 2030 initiative, which focuses on innovation in financial services. Earlier this year, in a message on his vision for 2030, Saudi Arabia’s Crown Prince Mohammed bin Salman said the kingdom would “turn the Public Investment Fund into the world’s largest sovereign wealth fund. Our nation holds strong investment capabilities, which we will harness to stimulate our economy and diversify our revenues,” he said.

Early stages of the collaboration will include pilot projects that will test the viability of blockchain in live banking environments. These trials will include cybersecurity safeguards, regulatory alignment, and customer education. Chainlink’s built-in security standards and compliance ethos help advance SAB’s objective of bringing solutions that comply with domestic and international best practices.

In April, Saudi Arabia also announced that it has invested in almost 40 U.S. venture capital firms, with several targeting cryptocurrency, blockchain, and Web3 initiatives. Sanabil, the investment arm of the Public Investment Fund, is central to this push. The firm invests approximately $2 billion per year in several funding rounds to support companies developing innovative business models.

Expanding Saudi banking through blockchain partnerships

The partnership with Chainlink furthers SAB’s history of blockchain adoption. Earlier this year, SAB led the world’s first Islamic Repo using blockchain in collaboration with Oumla, a Saudi-based blockchain infrastructure provider. The transaction enabled the bank to lend funds to its peers according to Islamic finance regulations, while using blockchain to increase speed, transparency, and safety. SAB has also held a virtual assets summit to demonstrate its digital ambitions and opportunities in tokenized finance. 

Saudi Arabia’s blockchain hype goes beyond SAB. Oumla, in partnership with Avalanche, recently announced plans to construct the nation’s first Layer 1 blockchain that will be fully hosted within the Kingdom. The project aims to support startups and small businesses, support technological development, and grow the regional Web3 ecosystem. Following the announcement, Chainlink is up 3.36% in the last 24 hours, trading at $23.40.

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