 Assessing the GCC Regulatory Landscape for FinTechHamoudah S. Al-Zaini () and
Khalid I. Ahmad ()
Chapter 6 in Digital Finance and Transformation in the Gulf, 2026, pp 131-169 from Springer Abstract: Abstract Technological innovations, supported by their disruptive power, have played a significant role in the digital transformation that has impacted the financial industry. Moreover, new technologies have reshaped the financial sector by introducing more efficient, cost-effective, and consumer-friendly services. Consequently, new financial technologies, or ‘FinTech,’ have had a significant global impact on regulatory changes in the financial industry, and major regulators and policymakers have introduced new regulatory frameworks to regulate the emerging FinTech sector. The global impact of regulatory changes on the financial industry has also impacted all the Gulf Cooperation Council (GCC) states. The FinTech landscape in GCC has experienced rapid growth over the past few years, and all GCC states have introduced new FinTech regulations. Based on their National Visions, the GCC governments consider supporting the FinTech sector as part of their goal to achieve economic diversification. Moreover, the GCC governments have developed new FinTech regulations to promote financial innovation and position themselves as FinTech hubs. All GCC states offer attractive programs supported by favorable regulatory frameworks to attract FinTech and startup firms. For example, Bahrain has introduced Bahrain FinTech Bay (BFB), Qatar has launched its FinTech Hub, Saudi Arabia has announced its FinTech Saudi, and the UAE has three FinTech programs offered by the UAE Central Bank, ADGM, and DIFC. However, the diverse landscape of FinTech in the GCC presents several challenges. To highlight a few, the lack of harmonized FinTech regulations creates a complex environment for FinTech companies operating in the different GCC states. Additionally, some FinTech regulatory frameworks are evolving and require further development to provide consistent and clear regulations. Furthermore, fragmented markets and varying levels of FinTech regulatory infrastructure in the GCC pose a significant challenge for FinTech companies, as these frameworks do not provide a standardized ecosystem. For instance, GCC Central Banks have applied different regulations for similar FinTech products, such as cryptocurrencies, digital assets, buy-now-pay-later, digital banking, open banking, and payment service providers. For example, the Central Bank of Bahrain and the Central Bank of the UAE have permitted trading in cryptocurrencies and digital assets. However, the Central Bank of Oman and the Saudi Central Bank have applied a more cautious approach. Neither Central Banks ban trading on these new digital assets, but they restrict banks from engaging in cryptocurrency and digital asset trading. In contrast, the Central Bank of Kuwait and the Qatar Central Bank have taken a clear and conservative approach. Qatar Central Bank permits only the trading of tokenized securities under specific conditions. In this paper, we conduct a comparative legal analysis to illustrate how various country-specific regulatory frameworks have created indirect barriers for FinTech and startup companies seeking to scale regionally. We also highlight the GCC’s essential role in coordinating and encouraging its members to establish a regional FinTech sandbox. This regional sandbox should facilitate the establishment of standard regulatory requirements applicable across all GCC countries. In conjunction with their independent national visions, all GCC members need to work toward formulating a cohesive regional economic vision. The lack of a unified regional vision has led to the emergence of competing national visions and economic development programs. The GCC Council should also support all Central Banks in modernizing their domestic financial regulations and capital markets rules to attract more foreign direct investment. In addition, the Council should promote innovation in other relevant fields by establishing regional sandboxes for data sharing, blockchain technologies, artificial intelligence, and cybersecurity. This chapter is divided into four sections. It begins with a brief overview of the national visions of the GCC States and highlights the main drivers behind each country’s economic diversification strategy. The second section surveys the FinTech regulations implemented by each member state and discusses how GCC States are competing to attract FinTech companies. The third section focuses on the reasons the Council should coordinate and harmonize the regional regulatory requirements for establishing FinTech and startup firms. Finally, the last section illustrates the various benefits that the region can achieve by implementing standardized regulatory requirements. Keywords: Central Banks; Cross-border finance; FinTech; GCC; Multijurisdictional sandboxes; National visions; Regulatory harmonization (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-92-1588-1_6 Ordering information: This item can be ordered from DOI: 10.1007/978-981-92-1588-1_6 Access Statistics for this chapter More chapters in Springer Books from Springer |
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