While digitisation has revolutionised the banking sector, it has also facilitated the growth of digital currencies. Over the last few years, the cryptocurrency market has expanded rapidly, with three-quarters of residents (77%) in Saudi Arabia claiming to be aware of it as an asset class, according to the latest YouGov survey.
However, while awareness is high among KSA residents, only 18% of them currently trade in cryptocurrencies, the survey highlights.
The survey collected data online from among 1,006 respondents in Saudi Arabia through YouGov’s Omnibus between 1 February and 7 February 2022, using the firm’s panel of more than 15 million people worldwide.
Young adults, between 25-34 years, responding to the survey stated that they are more likely to say they are dealing in cryptocurrencies (at 25%), while older adults aged 45+ seem hesitant and don’t intend to deal with it (37%).
Additionally, the popularity of cryptocurrencies is also higher among high-income households – who earn $8,000+ (SAR30,000+) – and they are more likely than others to trade in this asset class.
Despite the small number of active crypto investors in the kingdom, the future of this digital asset looks promising as more than a third (34%) of surveyed respondents who are aware about cryptocurrencies said they intend to invest in them.
The idea of investing in crypto is more appealing to men than women (36% vs 30%), the survey stated.
A quarter (25%) of those aware, do not intend to invest in cryptocurrency and almost as many (23%) are simply unaware of it.
Appetite for digital banking and crypto in Saudi Arabia
Digital banking has become increasingly popular in Saudi Arabia, with nine out of ten respondents (91%) saying they prefer banking online.
In addition, 86% of respondents have shown an intent to switch to digital-only banking methods in the future.
Currently, the key motivation for most KSA residents – who either invest or plan to invest in digital currencies – is the easy accessibility of virtual coins for trading (49%).
High returns compared to other investments (43%) comes as the second biggest motivator, and this aspect has a higher appeal among 45+ adults as compared to the rest.
Many invest in crypto to diversify their portfolio (38%), because they consider this mode secure (27%), transparent (15%) or because they think it is a long-term investment option (20%). Few invest based on recommendations from friends and family (13%).
Crypto as a means of diversifying investment portfolio is considered to be more of a stimulating reason for high-income individuals earning 30,000+, while recommendations from friends and family is more important to those earning SAR 2000 to 15000 than others.
Concerns surrounding crypto in the KSA
In 2021, the governor of the Saudi Central Bank (SAMA), Fahad Al-Mubarak, stressed that traditional banking systems will remain prominent and will not face “destruction” by digital currencies, as highlighted in this Arabian Business report.
This sentiment has been reiterated in the recent YouGov survey, which states that there are many who deter from investing in cryptocurrencies.
Almost two in five (37%) KSA residents who do not plan to invest in cryptocurrencies consider the volatility and instability of the virtual currency market as the key factor discouraging them from investing.
No past investment experience (36%) and lack of knowledge (31%) are also seen as top deterrents.
Religion beliefs (15%) and cybersecurity threats (13%) are some other reasons for not wanting to invest in them, the survey stated.
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