The Strategic Response to the Stablecoin Paradox**

By Saeid Mohammed Obaid Binzagr — 6 December 2025

Executive Summary
Stablecoins are expanding rapidly because they offer two advantages: speed and low cost. Yet they simultaneously shift parts of monetary and payment control from central banks to private entities. Regulation alone cannot neutralize this paradox. A national Unified Payment Rail (UPR) is the only structural tool that allows a country to retain sovereignty while matching the efficiency that drives users toward stablecoins.

Problem Statement
Current Saudi payment systems — Sarie, Mada, SADAD, and digital wallets — are operationally strong by global standards. However, they operate as parallel infrastructures rather than as a unified protocol. This creates structural fragmentation, increasing integration costs, limiting cross-border interoperability, and making it harder to absorb emerging technologies such as CBDCs or regulatory-compliant stablecoins.

Strategic Risk
Without a unified national rail, stablecoins become the “default alternative rail” for fast, low-cost payments. This introduces:
• Exposure to dollar-denominated digital flows (“digital dollarization”)
• Reduced effectiveness of monetary tools
• Dependence on foreign payment standards
• Higher long-term costs for banks, PSPs, and merchants
• Capital leakage into offshore payment systems

Regional Consideration: UAE Case
The UAE is progressing aggressively toward a unified infrastructure. If completed before Saudi Arabia, it may become the default regional settlement hub. This would gradually shift payment gravity toward a non-Saudi rail, with long-term implications for the Kingdom’s monetary autonomy and its role as the Gulf’s financial center.

Economic Impact (Estimates)
Comparative evidence from India (UPI) and Brazil (PIX) suggests that:
• Reducing payment friction by 0.3% could add ≈ SAR 5 billion annually to the Saudi economy.
• A fully deployed UPR could generate SAR 15–30 billion in cumulative annual economic benefit through cost reduction, efficiency gains, and higher financial-sector innovation.
These are indicative estimates illustrating directional impact.

Addressing Criticism
Concerns about centralization, transition cost, or technical risk are valid but manageable. The real systemic risk lies not in building a unified rail, but in failing to build one, leaving the Saudi ecosystem fragmented and vulnerable to parallel private rails or foreign infrastructures.

Conclusion
In a region where digital payments evolve faster than regulation, infrastructure is strategy. Saudi Arabia must build its Unified Payment Rail not to improve what exists, but to protect monetary sovereignty, strengthen regional leadership, and anchor the future digital Riyal