State Street: Saudi Arabia can develop digital finance

Saudi Arabia can leverage its Vision 2030 programme to build a modern digital financial infrastructure through tokenization, digital money and artificial intelligence, Angus Fletcher, head of digital solutions at State Street, said in a recent interview. Fletcher argued that financial institutions are moving beyond blockchain experiments toward institutional use of digital assets and that Saudi markets are well positioned to adopt tokenized funds, government securities and private assets as part of broader capital‑market modernization.

"Tokenization is not an end in itself, but can become a catalyst for modernizing financial market infrastructure," Fletcher said, underscoring tokenization's practical value for improving settlements, collateral management, asset allocation and liquidity.

Fletcher mapped out how tokenization and new forms of digital money — including stablecoins and tokenized deposits — could "combine the movement of assets, funds, and data into a more integrated system than the current financial system." He suggested such instruments could increase the efficiency of cross‑border investment flows, reduce locked liquidity and improve collateral mobility between markets.

Practical use cases and institutional adoption

At State Street, Fletcher highlighted three areas likely to see early institutional adoption: tokenized money market funds, tokenized government securities and tokenized private assets such as private equity and real estate. By converting these instruments into tokenized forms, he said, market participants would gain faster settlement cycles, clearer ownership records and more efficient collateral reuse.

• Tokenized money market funds and government securities — expected to be widely adopted in the coming years.
• Tokenized deposits and stablecoins — positioned as building blocks for integrated payments and settlement rails.
• Private market tokenization — a way to broaden investor access and improve liquidity in traditionally illiquid assets.

Fletcher also described the role of artificial intelligence in the emerging stack. "Artificial intelligence will play an increasingly prominent role in liquidity management, settlement and funding decisions, as well as risk monitoring," he said. AI, he added, can automate data reconciliation, optimise operational processes and strengthen compliance with regulatory requirements — functions that become critical when digital assets are used at scale by large institutions.

However, Fletcher warned that widespread institutional adoption depends on clearer rules and interoperable market infrastructure. "Financial institutions are not seeking weaker regulation, but clear rules that provide legal certainty, investor protection, and operational flexibility," he said, calling for aligned regulatory frameworks and operating models fit for institutional use.

Outlook for Saudi markets

For Saudi Arabia specifically, Fletcher identified three basic layers of future digital infrastructure that regulators and market participants should prioritise: digital money for settlements; systems for identification, governance, cybersecurity and operational resilience; and an intelligent layer that leverages AI for optimisation and risk control. If implemented within the Vision 2030 agenda, these elements could accelerate capital‑market development, enhance cross‑border investment flows and improve collateral mobility — positioning Saudi markets among early institutional adopters of digital finance.