Overview of Global RWA Compliance Landscape: Strategic Coordination of Saudi Regulatory Sandbox and National Projects

The Saudi Central Bank has launched a “Regulatory Sandbox” project, and the NEOM city is deploying Blockchain infrastructure. This oil kingdom is igniting a silent revolution in the digital economy.

Saudi Arabia is ushering in a key year for its RWA development in 2025. According to The Paper, the Saudi Central Bank's Regulatory Sandbox program has been opened to various innovative entities, and the Capital Market Authority's Fintech Lab has issued a total of 68 fintech experimental licenses, attracting 50 companies to register. Meanwhile, as a landmark project of the “Vision 2030”, the NEOM city has announced the establishment of a sovereign-level Blockchain infrastructure, becoming the first large-scale government-led Blockchain project in the Middle East. These initiatives collectively signify Saudi Arabia's determination to advance digital financial transformation at the national strategic level.

In the digital financial oasis rising in the desert, Saudi Arabia is quietly rewriting the game rules for real asset tokenization in the Middle East through pilot projects such as real estate tokenization.

1. The Development Path of Saudi RWA from a Global Perspective

From the perspective of the global regulatory landscape, countries are showing different development paths in the RWA field. The U.S. Securities and Exchange Commission continues its tradition of case law, gradually building a regulatory framework through specific cases. This model, while flexible, lacks relative certainty. The Monetary Authority of Singapore adopts a more systematic regulatory approach, providing clear guidance through documents such as the “Guidelines on Digital Token Offerings.” Against this global backdrop, Saudi Arabia has chosen a unique development path, which is neither in line with the traditional regulatory ideas of Western countries nor similar to the relatively aggressive open strategies of some Asian countries.

The regional comparison between Saudi Arabia and the UAE is particularly striking. According to public information, the UAE has attracted a large number of digital asset companies due to the cutting-edge regulatory framework of the Dubai International Financial Center and the Abu Dhabi Global Market. In contrast, Saudi Arabia leverages its scale advantage as the largest economy in the Middle East, demonstrating a stronger national strategic orientation. Notably, the Project Aber Central Bank digital currency pilot project jointly promoted by Saudi Arabia and the UAE shows the potential for regional collaborative development. This pattern of both competition and cooperation is making the Middle East an important testing ground for global RWA development, also providing a unique regional environment for Saudi Arabia's RWA development.

2. Strategic Opportunities and Basic Conditions of the Saudi RWA Market

The rise of the RWA market in Saudi Arabia is closely linked to the modernization of its financial infrastructure. The payment system upgrade project promoted by the Saudi Central Bank provides a solid foundation for digital asset trading, while the Capital Market Authority's revision of the Investment Fund Regulations creates a favorable institutional environment for digital investment tools. These systemic reform measures together constitute the three main pillars of the development of the RWA market in Saudi Arabia: the certainty of policy support, the advancement of technological readiness, and the growth of market demand.

According to the framework of Saudi Arabia's “Vision 2030”, the government views asset digitization as an important way to enhance the efficiency of financial markets and attract foreign investment. This policy direction provides clear guidance for the development of RWA. At the same time, Saudi Arabia's unique demographic structure provides a market foundation for RWA development. Over 70% of the population is under the age of 35, and these young groups have a natural acceptance of digital technology, creating favorable conditions for innovative financial products. The tokenization of partial ownership in RWA effectively lowers the investment threshold, allowing the general public to participate in high-value asset investments with a lower amount, and this democratized investment approach aligns perfectly with Saudi Arabia's national goal of promoting financial inclusion.

3. Collaborative Innovation and Institutional Design of the Regulatory Framework

Saudi Arabia adopts a diversified regulatory model to build its RWA regulatory system, with the Saudi Central Bank and the Capital Market Authority playing key roles in this system. The Saudi Central Bank is primarily responsible for the regulation of payment systems, banking institutions, and certain digital businesses, with its regulatory power derived from the Saudi Central Bank Law and related regulations. The Capital Market Authority focuses on the regulation of capital markets and investment services, having important regulatory responsibilities for RWA projects involving security tokens. This clearly defined regulatory framework reflects the Saudi authorities' cautious balance between encouraging innovation and controlling risks.

The regulatory sandbox mechanism of the Saudi Central Bank provides an important testing platform for RWA innovation. This mechanism is open to four types of innovators: innovators licensed by the Saudi Central Bank, unlicensed local fintech companies, and unlicensed international fintech companies. At the same time, the Saudi Central Bank has also clearly defined situations that are not suitable for entering the regulatory sandbox, including projects lacking innovation or technical maturity. These admission standards ensure the quality and effectiveness of sandbox testing, providing development space for truly valuable innovative projects.

The Capital Market Authority is also actively promoting regulatory innovation. By the end of the second quarter of 2025, the CMA had issued a total of 68 financial technology experiment licenses. Among the 50 companies registered in its financial technology laboratory, 36 have entered the substantive operation stage, and 5 have successfully graduated. This data reflects the substantial progress Saudi Arabia has made in building a financial technology ecosystem.

IV. Progress and Strategic Significance of Government-Led Project Implementation

The Saudi Central Bank's Regulatory Sandbox project has become an important platform for the government to promote the development of RWAs. According to the sandbox rules, innovators can access the platform through various pathways. For unlicensed international fintech companies, they can choose to apply directly to the Regulatory Sandbox, and upon acceptance, register with the Saudi Ministry of Investment and the Ministry of Commerce to establish a legal entity; alternatively, they can enter the sandbox indirectly by reaching agreements with companies licensed by the Saudi Central Bank. This flexible arrangement demonstrates Saudi Arabia's commitment to attracting international innovative forces while also maintaining a focus on regulatory responsibilities.

The blockchain infrastructure project of NEOM City is another important practice by Saudi Arabia in the RWA field. As a flagship project of the “Vision 2030,” NEOM City plans to invest $500 billion, with the blockchain infrastructure seen as the core technology supporting its digital economy system. According to publicly available information, this blockchain platform will support functions such as asset registration, transaction settlement, and compliance monitoring, laying the technological foundation for larger-scale asset tokenization in the future. This project is entirely government-led and closely linked to Saudi Arabia's national transformation strategy, reflecting the government's core role in the development of RWA.

V. Compliance Path and Systemic Risk Control

For institutions seeking to develop RWA projects in Saudi Arabia, following a phased compliance path is crucial. First, it is necessary to conduct preliminary consultations with regulatory authorities to clarify the regulatory scope of the project. Then, it enters the Regulatory Sandbox application and testing phase, where a detailed testing plan must be submitted, including clear objectives, timelines, and risk control measures. Finally, after successfully completing the sandbox test, the project can obtain limited authorization and ultimately transition to full operation after meeting all regulatory requirements.

In this process, institutions need to pay special attention to multiple risk challenges. Regulatory classification uncertainty is the primary challenge, as RWA projects often exist in the gray area of traditional regulatory classifications and may simultaneously involve multiple regulatory fields such as securities, payment, and investment. Technical infrastructure compatibility is another major challenge, as the technical compatibility issues between blockchain and traditional financial infrastructure, as well as meeting regulatory requirements for system security and stability, need to be addressed seriously. Cross-border regulatory compliance cannot be overlooked either, as RWA projects involving cross-border transactions may trigger regulatory compliance issues across multiple jurisdictions.

It is worth noting that Saudi regulators have recognized these challenges and are seeking solutions through mechanisms such as the Regulatory Sandbox. The sandbox rules clearly state that the Saudi Central Bank will investigate the allocation of responsibilities between licensed entities and unlicensed innovators who collaborate with Saudi Central Bank licensed companies. This prudent approach reflects Saudi Arabia's high emphasis on risk management while promoting innovation.

6. Future Outlook and Development Path of Saudi RWA

With the ongoing development of RWA in Saudi Arabia and the broader Middle East region, the regulatory environment is expected to show three distinct trends. The introduction of specialized regulatory frameworks will become the primary trend, as Saudi regulatory authorities are likely to launch new regulatory categories specifically for digital assets and tokenized assets. Strengthening regulatory collaboration is another significant trend, as the coordination mechanisms among the Saudi Central Bank, the Capital Market Authority, and other relevant regulatory bodies will become more institutionalized. The alignment with international standards cannot be overlooked, as Saudi Arabia, as a G20 member, will continue to align its financial regulations with international standards.

Based on current technological, market, and policy trends, the future development of the Saudi RWA market will show a diversified development trend. Diversification of asset classes will continue to advance, and in addition to the already effective real estate sector, the tokenization potential in areas such as infrastructure, renewable energy (like the NEOM project), and cultural tourism assets in Saudi Arabia will gradually be released. The participation of traditional financial institutions is expected to increase, with banks and asset management companies anticipated to be more actively involved in the RWA ecosystem construction. Cross-border connectivity will become an important direction for development, and Saudi Arabia may establish a regional digital asset trading platform through regulatory collaboration with neighboring countries.

For market participants, the short term should focus on asset classes with clear compliance pathways, fully utilizing the Regulatory Sandbox for concept validation; in the medium term, with the improvement of the regulatory framework, it can expand to more asset classes and consider applying for its own licenses; in the long term, a comprehensive digital asset service platform should be built, exploring opportunities for cross-border connectivity, and promoting a positive interaction between technological innovation and regulatory innovation.

Saudi Arabia's RWA development path demonstrates a unique balancing act—seeking the right balance between traditional financial regulation and modern blockchain technology, between national development strategies and market innovation vitality, and between local practice characteristics and international standards alignment. With the deepening of the “Vision 2030” initiative, the Saudi RWA market is expected to play an increasingly important role in connecting traditional assets with digital finance. Institutions that can layout early, actively communicate with regulatory agencies, and build comprehensive compliance capabilities are most likely to benefit from the rapid development of this emerging field.

Source of some information:

· “Saudi Arabia Extends the Implementation Period of the 'Cancellation of Tax Penalties and Exemption from Economic Sanctions Program'”

·“Saudi Arabia Cryptocurrency Regulatory Guidelines: Compliance Trading Practical Handbook”

· “How Can Middle East RWA Break Through? A Global Experimental Field from Capital Drive to Regulatory Implementation!”

Author: Liang Yu Editor: Zhao Yidan