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This year has proved to be a pivotal year for digital finance, with stablecoins edging into mainstream use, regulations approved that govern stablecoin, and customers increasingly expecting instant settlement for payments. Mobile digital payments are now routine for millions of people.The total value of all digital payments is projected to reach more than $20tn in 2025, according to Fintech Magazine. Mobile payments comprise 79% of digital transactions.There have been many discussions, and feasibility studies, into the establishment of central bank digital currencies, but with few initiatives. The pattern emerging is that governments are preferring to regulate private providers of stablecoins.The increasing use of stablecoins was a major talking point at October’s annual IMF summit in October. Stablecoins are tokens on a blockchain used as digital cash. They differ from a cryptocurrency in that they are pegged one-to-one with a hard currency, usually the dollar. Examples include Ethereum and Tether. Their use has surged in the past two-three years. Stablecoin usage accounts for around $30bn transactions daily. This is under 1% of all transactions, but it is double the amount of 18 months ago. At current rates, stablecoin use could overtake legacy systems within a decade.Some of the wariness about a digital currency – that it is intangible and only has value if both parties trust it – has also been true of the major fiat currencies since they came off the gold standard in the early 1970s. People in advanced economies with hard currencies and a mature, well-capitalised banking system, may place more faith in established institutions, but in emerging markets many people are unbanked, and have had experience of the local currency collapsing in value due to high inflation.A major potential obstacle was that each stablecoin was proprietary to the firm that set it up, limiting their range and potential. But this limitation has been overcome through technical ‘bridges’, which enable tokens to be transferred across different blockchains.For many uses, a blockchain-based currency has advantages over the conventional banking system. Transactions, including cross-border transactions, are in real time, 24/7, typically settled in a second or two. Conversion to local currency has been made easier. There have been technical advances by fintechs, for example making digital wallets and payments by mobile phone user-friendly.For commercial transactions, the stablecoin can be embedded in a smart contract, such that settlement is instant as soon as a delivery is made. This ease of settlement can reduce costs and delays in supply chains.Stablecoin transfers are cheaper than conventional international transfers, with the fintech charging a few cents, rather than a few dollars. International money transfers through banks still go through a clearing system, which may take some days.A report by the consultancy McKinsey identified that the three main uses of stablecoins are settling cryptocurrency trading, cross-border payments especially by migrant workers and small businesses, and emerging market governments as a hedge against inflation and for peer-to-peer payments. PricewaterhouseCoopers also noted significant use by institutional investors and high net-worth individuals. The number of active wallets using stablecoins increased by 53% between February 2024 and February 2025, numbering over 30mn.Regulations governing the use of stablecoins have encouraged their adoption. The GENIUS Act, passed by the US in June this year, sets out provisions for oversight, reserves and stability of stablecoins.Regulation will help but there are risks. Stablecoins are not legal tender, and holders of stablecoins do not have a legal entitlement to the underlying asset. Stablecoins require an off-ramp – conversion to local currency – although in the future more people may choose to hold funds in stablecoins. No national government will compensate deposit holders in the case of losses due to a run on a stablecoin, as is the case with many mainstream banks where regulations safeguard citizens’ deposits, though they may be capped in some instances.There is a run risk with stablecoins: while they are primarily for transactional, not speculative, purposes, it is possible that a large number of investors could redeem their holdings simultaneously. This is not a theoretical risk: The stablecoin Terra collapsed in May 2022 following a sudden collapse in confidence by holders. Although a stablecoin is set up with a peg to an established currency, there have been instances of de-pegging, linked to concerns over reserves.Security is a risk with all financial holdings and transactions. Established stablecoin operators do have checks to prevent fraud, such as ‘know your customer’ (KYC), and anti-money laundering (AML) measures.In other ways, the digital revolution is changing payments systems. Even within the banking industry – for example, banks now partner with fintechs to send money internationally more quickly than through the clearing system of banks.Established financial firms may purchase or partner with fintechs to expand their coverage in digital finance. US giant JP Morgan has set up a JPM Coin, a stablecoin. From the opposite direction, some Web 3.0 fintechs may seek a banking licence.The broader picture is one of global money becoming digital, mobile, international, with instant settlements and lower fees.The author is a Qatari banker, with many years of experience in the banking sector in senior positions. 

Legal PerspectiveDue to increasing need to utilise new technologies in business, many new solutions are offered to help in this arena. We mention, in this connection, that RegTech, as a sub-industry of Fintech, is reaching high funding and it will continue to grow as businesses work hard to stay compliant with the new and existing regulations.The growth of this new industry is due to many factors and reasons including, among other things, noticeable volume of regulatory requirements, big fines in cases of non-compliance, clear activity in the use of technology especially after Covid-19, increased funding for RegTech companies, etc.This new technology, no doubt, offers safer, faster and more efficient workflows and therefore institutions are expected to increase spending on RegTech solutions to streamline their role and future business.It goes without saying that, the increased digitalisation, particularly in banking, has given rise to a number of challenges, both to regulators and likewise to executors. There has been a remarkable increase in the services provided. However, at the same time, there is also remarkable increase in new crimes, cyber-crimes, including data breaches, cyber hacks, risk of money laundering, and fraud.By using technology, the RegTech companies have started proving that they can do a better job than normal legacy systems particularly with reference to the detection of illegal activities. As we see, at present, RegTech companies operate in various areas of the financial and regulatory space.In the financial sector, as example, the regulators across the globe have come up with a number of mandates to increase transparency and reduce risk. The sheer volume of new norms for compliance added, increased or complicated the troubles facing the financial institutions. It has been noticed that, highly regulated industries such as the banking industry is facing ever-increasing regulatory compliance obligations.Herein, modern new technologies, such as artificial intelligence (AI), biometrics and machine learning, can be utilised by the banking and financial industries to address challenges for regulatory compliance. RegTech companies are using these technologies in their solutions to make regulatory compliance processes more efficient and effective.RegTech solutions have various applications such as financial crime detection and prevention, cybercrime supervision, tracking and recording compliance activities, centralisation and timely submission of regulatory filings and streamlining market review workflows.Needless to say that, they can help compliance departments achieve a greater return on investment by increasing operational efficiencies, reducing operational costs and mitigating the risk of breach of regulatory norms. It’s good to follow and adopt this new activity, however, the need for human professionals is irreplaceable and the professional minds along with the new machine’s abilities shall work in collaboration to benefit our society for a prosperous future.Dr AbdelGadir Warsama Ghalib is a corporate legal counsel. Email: [email protected]

QNB KSA has announced the signing of a strategic partnership agreement with Sanad Pay, a leading Saudi fintech and licensed point-of-sale (POS) service provider, to introduce smart, cloud-based POS terminals that bring merchants seamless connectivity, modern design, and real-time analytics to enhance their business performance.The agreement marks the start of a collaboration aimed at providing merchants across Saudi Arabia with secure, reliable, and innovative POS solutions that meet the highest standards of quality and compliance, in line with Saudi Vision 2030’s goal of advancing a cashless economy.The signing was attended by Hashim Alawi al-Hussain, VP Transaction Banking at QNB KSA and Maher Mahdi al-Shahin, CEO, Sanad Pay, in the presence of several senior representatives from both sides.Through this service, merchants can accept multiple payment methods including debit and credit cards (Visa, MasterCard, Mada), contactless payments (Apple Pay, STC Pay), and QR code transactions — all through a single device.The solution also provides advanced digital invoicing, inventory management, and accounting system integration, allowing businesses to track and manage their operations efficiently.With built-in monitoring and backup systems, merchants are assured of uninterrupted business operations, while a centralised platform enables them to access consolidated reports and monitor sales performance with ease.This initiative allows QNB KSA to expand its value-added services offering to clients while maintaining its core banking and relationship focus.