BY DR SOHA MAAD
Introduction
This article presents a comprehensive overview of the growth of onchain finance globally and in Arab countries with a focus on growth and key providers of onchain finance in Saudi Arabia, United Arab Emirates, Qatar, Kuwait, and Lebanon. The article highlights challenges facing onchain finance followed by a SWOT (strengths, weaknesses, opportunities, and threats) analysis. Key technologies and infrastructure, regulation, and major platforms offering onchain finance are considered. The article concludes with the future of onchain finance and the road ahead for Arab banks to embrace onchain finance.
Onchain Finance at a GLANCE
Onchain finance refers to financial activities and services that are executed and recorded directly on blockchain, without relying on traditional intermediaries like banks or brokers. It encompasses decentralized finance (DeFi) applications such as lending, borrowing, trading, and asset management, all governed by smart contracts, and self-executing code that enforces rules transparently and automatically. By operating on public blockchains like Ethereum, onchain finance offers greater transparency, accessibility, and programmability, enabling users to interact with financial products in a secure environment.
Onchain Finance Technologies and Infrastructure
Layer / Component | Core Technologies | Functions | Examples / Notes |
Base Layer (L1 Blockchains) | Ethereum, Solana, Avalanche, Cosmos | Consensus, security, settlement | Ethereum dominates DeFi; Solana optimized for speed; Cosmos enables modular chains |
Scaling Solutions (L2 / Rollups) | Optimistic Rollups, ZK-Rollups, Sidechains | Scalability, lower fees, faster execution | Arbitrum, Optimism, StarkNet; Polygon PoS sidechain |
Smart Contracts | Solidity, Rust, Move | Automated financial agreements, programmable logic | Lending, trading, derivatives, compliance automation |
Tokenization Frameworks | ERC-20, ERC-721, ERC-1155, ERC-1400 | Representation of assets (currencies, securities, RWAs) | Tokenized bonds, equities, real estate, stablecoins |
Stablecoins & Settlement Assets | USDC, DAI, Euro-backed stablecoins | Predictable settlement, reduced volatility | USDC widely adopted in DeFi and institutional rails |
Data Infrastructure (Oracles) | Chainlink, Pyth, The Graph | Secure data feeds, analytics, benchmarks | Chainlink brings FTSE Russell indices onchain |
Interoperability Protocols | Cross-chain bridges, IBC (Cosmos), Wormhole | Liquidity transfer, multi-chain connectivity | Wormhole connects Solana; Ethereum; Cosmos IBC |
Privacy & Compliance Layers | Zero-Knowledge Proofs, Confidential Transactions | Regulatory compliance, data protection | ZK-proofs for AML/KYC, confidential settlement |
Custody & Access Infrastructure | MPC wallets, Hardware wallets, Institutional custody | Secure asset storage and access | Fireblocks, Coinbase Custody, Ledger |
Developer & Enterprise Tools | Cloud integrations (AWS, Azure) | Facilitate adoption, integration with TradFi | Circle Arc integrates with AWS, Visa, BlackRock |
Onchain finance and traditional finance differ fundamentally in architecture, accessibility, and transparency. Traditional finance relies on centralized institutions like banks and clearinghouses to manage transactions, enforce trust, and maintain records, often resulting in slower settlement times, limited access, and higher fees. In contrast, onchain finance operates on decentralized blockchain networks, where smart contracts automate financial processes, reduce intermediaries, and enable real-time, borderless transactions. This shift empowers users with greater control over assets, transparency through public ledgers, and inclusion for the unbanked. However, onchain finance also faces challenges such as regulatory uncertainty, scalability, and user education, making it a complementary, rather than replacement, model for the evolving financial ecosystem.
Onchain Finance Versus Traditional Finance
Onchain Finance | Traditional Finance | |
Infrastructure | Built on decentralized blockchain networks | Centralized institutions (banks, clearinghouses, regulators) |
Trust Mechanism | Trustless via smart contracts and public ledgers | Trust-based via intermediaries and legal frameworks |
Transparency | High: all transactions are publicly verifiable | Limited: records are private and controlled by institutions |
Accessibility | Global and open to anyone with internet access | Restricted by geography, documentation, and institutional gatekeeping |
Speed & Settlement | Near-instant settlement via smart contracts | Often delayed due to manual processes and intermediaries |
Cost Efficiency | Lower fees due to reduced intermediaries | Higher fees from banks, brokers, and service providers |
Security Risks | Vulnerable to smart contract bugs and protocol exploits | Vulnerable to institutional fraud, data breaches, and systemic failures |
Regulatory Clarity | Often unclear or evolving | Well-established and jurisdiction-specific |
Innovation Potential | High: programmable money, DeFi, tokenization, cross-chain interoperability | Moderate: innovation constrained by legacy systems and regulatory inertia |
User Experience | Can be complex and technical | Familiar and user-friendly for most consumers |
Onchain Finance Swot Analysis
STRENGTHES | WEAKNESSES |
Transparency: Transactions are recorded on public ledgers, reducing fraud and increasing accountability. Efficiency: Smart contracts automate processes, enabling faster settlements and lower operational costs. Accessibility: Open to anyone with internet access, promoting financial inclusion across borders. Security: Cryptographic protocols enhance data integrity and reduce reliance on centralized systems. | Scalability: Many blockchains struggle with high transaction volumes and network congestion. User Experience: Interfaces and workflows can be complex for non-technical users. Smart Contract Risks: Bugs or poorly written code can lead to financial losses. Regulatory Uncertainty: Legal frameworks are still evolving, creating compliance challenges.
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OPPORTUNITIES | THREATS |
Tokenization of Assets: Real-world assets like real estate and commodities can be fractionalized and traded onchain. Cross-Border Payments: Enables fast, low-cost international transactions without intermediaries. Decentralized Lending and Insurance: Opens new models for credit and risk management. Integration with AI and IoT: Enhances automation and real-time financial decision-making. | Regulatory Crackdowns: Governments may impose restrictions or bans on certain onchain activities. Market Volatility: Crypto assets are highly volatile, affecting stability and user confidence. Cybersecurity Risks: Protocols may be targeted by hackers or exploited through vulnerabilities. Centralization Risks: Some platforms may claim decentralization but retain control over governance or assets.
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Challenges Facing Onchain Finance
Onchain finance faces a complex set of challenges globally and within Arab countries, stemming from both technological and regulatory barriers. Worldwide, issues such as smart contract vulnerabilities, scalability limitations, and fragmented blockchain standards hinder seamless adoption. Regulatory uncertainty remains a major obstacle, with inconsistent policies across jurisdictions posing compliance risks for developers and users alike. In Arab countries, these challenges are compounded by limited blockchain infrastructure, low public awareness, and the need to align onchain financial products with Islamic finance principles. Additionally, the absence of unified regional frameworks and digital identity systems restricts cross-border interoperability and trust. Overcoming these hurdles will require coordinated efforts between governments, financial institutions, and tech innovators to build secure, inclusive, and Sharia-compliant onchain ecosystems.
Regulation of Onchain Finance
Regulation of onchain finance is evolving rapidly across the globe, with governments seeking to balance innovation with consumer protection and financial stability. In major economies like the United States (U.S.), European Union (EU), and Singapore, regulators are introducing frameworks for stablecoins, decentralized finance (DeFi), and tokenized assets, while enforcing anti-money laundering (AML) and know-your-customer (KYC) standards. In Arab countries, the regulatory landscape is mixed: Gulf nations such as the United Arab Emirates (UAE), Bahrain, and Saudi Arabia are leading with sandbox programs and licensing regimes for crypto exchanges and blockchain platforms, aiming to become regional fintech hubs. Meanwhile, other Arab states remain cautious, often lacking clear legal definitions for digital assets. Harmonizing regulations across the region and aligning them with global standards will be key to unlocking the full potential of onchain finance in the Arab world.
Online Platforms Offering Onchain Finance
Several online platforms are leading the way in offering onchain finance services, ranging from decentralized lending to tokenized asset management. These platforms leverage blockchain technology to deliver transparent, automated, and borderless financial solutions.
Leading Online Platforms offering Onchain Finance
Platform | Category | Key Features | Website |
Aave | Lending & Borrowing | Decentralized lending protocol with variable/stable interest rates | aave.com |
Compound | Lending & Borrowing | Algorithmic money markets for crypto assets | compound.finance |
Maple Finance | Institutional Credit | Under-collateralized loans for institutions | maple.finance |
Uniswap | Decentralized Exchange | AMM-based token swaps on Ethereum | uniswap.org |
Curve Finance | Stablecoin Exchange | Low-slippage trading optimized for stablecoins | curve.fi |
Balancer | Liquidity & Portfolio | Customizable liquidity pools and portfolio rebalancing | balancer.fi |
Enzyme Finance | Asset Management | Onchain vaults for managing crypto portfolios | enzyme.finance |
Centrifuge | Real-World Asset Tokenization | Tokenizes invoices, real estate, and other offchain assets | centrifuge.io |
Ondo Finance | Tokenized Treasuries | Offers tokenized exposure to U.S. Treasuries and yield-bearing assets | ondo.finance |
Nexus Mutual | Insurance | Covers smart contract and protocol risks | nexusmutual.io |
InsurAce | Insurance | Multi-chain insurance for DeFi protocols | insurace.io |
Circle (USDC) | Payments & Treasury | Stablecoin infrastructure for payments and treasury management | circle.com |
Celo | Mobile Payments | Blockchain platform focused on mobile-first financial tools | celo.org |
Tokeny | Tokenized Securities | Issuance and compliance for tokenized financial instruments | tokeny.com |
Chainlink | Oracle Infrastructure | Decentralized data feeds for price, weather, and real-world events | chain.link |
Size of Global Onchain Finance Market
According to Precedence Research, the global onchain finance market is projected to reach approximately $32.36 billion in 2025, driven by rapid growth in decentralized finance (DeFi) and tokenized real-world assets. This figure reflects the expanding scope of blockchain-based financial services, including lending, trading, and asset management conducted via smart contracts. One of the fastest-growing segments is the tokenization of real-world assets (RWAs), which surged from $5 billion in 2022 to over $24 billion by mid-2025, a 380% increase. According to Health Markets statistics (healthmarkets.com), onchain revenue from blockchain application fees grew by 126% in the first half of 2025, signaling strong user demand and ecosystem. With a compound annual growth rate (CAGR) of over 53%, the market is expected to surpass $1.5 trillion by 2034, underscoring its transformative potential across global finance.
Size and growth of the global onchain finance market (Source: Precedence Research)
Metric | Value | Year | Notes |
Market Size | $32.36 billion | 2025 | Includes DeFi, tokenized assets, and onchain financial services |
Tokenized Real-World Assets (RWAs) | $24 billion | Mid-2025 | Up from $5 billion in 2022 (380% growth) |
Onchain Revenue Growth | +126% | H1 2025 | Driven by blockchain application fees |
Projected Market Size | $1.5 trillion | 2034 | Based on a compound annual growth rate (CAGR) of over 53% |
DeFi Total Value Locked (TVL) | ~$60 billion | 2025 | Reflects capital in decentralized finance protocols |
Onchain Finance in Arab Countries
Onchain finance in Arab countries is rapidly evolving, driven by digital transformation, youth adoption, and progressive regulatory frameworks. Across the Middle East and North Africa (MENA), Arab nations are embracing blockchain-based financial services, especially decentralized finance (DeFi) and tokenized assets, as part of a broader digital finance revolution. Countries like the UAE, Saudi Arabia, and Bahrain are leading with initiatives in open finance, expanding beyond open banking to include investments, insurance, and credit services. According to Statista, the regional market is forecasted to grow from $1.65 billion in 2022 to $11.74 billion by 2027, reflecting a compound annual growth rate (CAGR) of 45%. This surge is fuelled by high smartphone penetration, improved internet infrastructure, and government-backed fintech strategies that aim to enhance financial inclusion and economic participation. Arab regulators are also collaborating through regional fintech working groups to harmonize standards and foster innovationamf.org.ae.
Key aspects of onchain finance in Arab countries
Country | Initiatives | Regulatory Stance | Market Highlights |
UAE | Dubai and Abu Dhabi host blockchain hubs; active in tokenized assets and DeFi | Pro-innovation; clear crypto regulations | Leading MENA region in blockchain adoption and fintech investment |
Saudi Arabia | Vision 2030 includes digital finance; partnerships with blockchain firms | Supportive but cautious; exploring Central Bank Digital Currencies (CBDCs) | Growing interest in tokenized real estate and digital banking |
Bahrain | Early adopter of crypto regulation; hosts regional DeFi platforms | Progressive; crypto licenses issued | Strong fintech ecosystem with open banking and onchain finance integration |
Egypt | Exploring blockchain for remittances and financial inclusion | Conservative; limited crypto access | High potential due to large unbanked population and mobile penetration |
Jordan | Blockchain pilots in government and finance sectors | Monitoring developments | Emerging interest in decentralized identity and finance |
Qatar | Fintech sandbox includes blockchain startups | Restrictive on crypto; open to innovation | Focused on institutional use of blockchain for finance and compliance |
Lebanon | Grassroots crypto adoption amid banking crisis | Unregulated; informal crypto use | Onchain finance used for remittances and preserving wealth |
Growth of on Chain Finance in Saudi Arabia
Saudi Arabia is actively embracing onchain finance, with major institutions like Saudi Awwal Bank (SAB) integrating blockchain technologies to modernize financial services. In 2025, SAB, one of the kingdom’s largest banks with over $100 billion in assets, partnered with Chainlink to deploy cross-chain interoperability and developer tools for next-generation onchain applications. This move reflects Saudi Arabia’s broader strategy to diversify its economy and lead in fintech innovation under Vision 2030. By leveraging Chainlink’s infrastructure, SAB aims to develop secure, transparent, and programmable financial services that align with global trends in decentralized finance (DeFi) and tokenized assets. The partnership signals growing institutional confidence in blockchain as a foundation for future banking and financial ecosystems in the region. As such, onchain finance in Saudi Arabia is experiencing accelerated growth, fueled by institutional adoption, government strategy, and rising fintech investment.
Leading providers of onchain finance in Saudi Arabia
Provider | Role in Onchain Finance | Notable Initiatives |
Saudi Awwal Bank (SAB) | Major institutional adopter of blockchain for financial services | Partnered with Chainlink in 2025 to deploy cross-chain interoperability and smart contracts |
Chainlink | Blockchain infrastructure provider enabling secure data and interoperability | Supplies SAB with Cross-Chain Interoperability Protocol (CCIP) and developer tools |
Local Fintechs | Emerging players exploring DeFi, tokenization, and digital banking | Participating in regulatory sandboxes and pilot programs |
Government Entities | Supporting ecosystem through Vision 2030 and fintech strategy | Encouraging blockchain adoption via policy and infrastructure investment |
These partnerships and initiatives are positioning Saudi Arabia as a rising hub for onchain financial innovation in the Middle East.
Growth of Onchain Finance in Uae
Onchain finance in the UAE is experiencing rapid growth, driven by government-backed innovation, regulatory clarity, and strategic investments in blockchain infrastructure. The UAE has positioned itself as a global leader in digital finance, with initiatives like the Arab Emirates AE stablecoin, pegged to the dirham, designed to facilitate onchain payments, trade, and tokenized asset flows. According to Digipay, the country’s fintech market is projected to grow from $2.97 billion in 2024 to $6.42 billion by 2030, reflecting a compound annual growth rate (CAGR) of 13.8%. Regulatory bodies such as the Central Bank of the UAE (CBUAE) and innovation hubs like the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) are actively fostering blockchain adoption. These efforts are transforming the UAE into a regional powerhouse for decentralized finance (DeFi), tokenized real-world assets, and programmable money.
Onchain finance providers in UAE
Provider | Role in Onchain Finance | Notable Initiatives |
Tawreeq Holdings | Supply Chain Finance (SCF) and Sharia-compliant onchain liquidity solutions | Offers tokenized working capital tools for SMEs across MENA (tawreeqholdings.com) |
Comarch Middle East FZ LLC | eInvoicing and data management solutions with blockchain integration | Pre-approved by UAE Ministry of Finance for electronic invoicing |
Cygnet Digital IT Solutions | Blockchain-based invoicing and digital finance infrastructure | Accredited for UAE’s eInvoicing system by Ministry of Finance in United Arab Emirates |
Defmacro Software DMCC | Blockchain-powered tax and finance platforms | Operates ClearTax UAE with onchain compliance tools |
Dubai International Financial Centre (DIFC) | Regulatory and innovation hub for fintech and blockchain startups | Hosts accelerators and sandbox programs for DeFi and tokenized finance |
Abu Dhabi Global Market (ADGM) | Financial free zone supporting blockchain and digital asset firms | Provides licensing and regulatory clarity for onchain finance ventures |
These providers contribute to the UAE’s emergence as a global hub for decentralized finance, tokenized assets, and programmable money.
Growth of Onchain Finance In Qatar
Onchain finance in Qatar is steadily gaining momentum, supported by the country’s fintech strategy and its commitment to digital transformation under Qatar National Vision 2030. The Qatar Financial Centre (QFC) is actively fostering the integration of blockchain and Islamic finance, offering incentives like 100% foreign ownership, profit repatriation, and a competitive tax system to attract global fintech. The digital payments market is projected to reach 2.87 million users by 2028, while neobanks and blockchain-based platforms are emerging as key players in reshaping financial services. Regulatory bodies such as the Qatar Central Bank are promoting innovation through sandbox programs and strategic partnerships, positioning Qatar as a rising hub for onchain finance in the Gulf region.
Key providers of onchain finance in Qatar and their roles
Provider | Role in Onchain Finance | Notable Initiatives |
Qatar Financial Centre (QFC) | Regulatory and business platform for fintech and blockchain firms | Offers sandbox programs and incentives for blockchain-based financial services |
Qatar Central Bank (QCB) | Oversees financial regulation and innovation | Exploring central bank digital currency (CBDC) and blockchain integration |
Qatar Development Bank (QDB) | Supports fintech startups and digital transformation | Provides funding and incubation for blockchain-based financial solutions |
Qatar FinTech Hub (QFTH) | Accelerator for fintech and DeFi startups | Hosts global blockchain startups and supports onchain finance innovation |
Local and Regional Fintechs | Emerging players in tokenized assets, digital payments, and Islamic DeFi | Participating in QFC and QFTH programs |
These institutions are laying the groundwork for a growing onchain finance ecosystem in Qatar, particularly in areas like Islamic finance, tokenization, and digital compliance.
Growth of Onchain Finance in Kuwait
Onchain finance in Kuwait is gaining traction as the country accelerates its digital transformation agenda, blending traditional banking with emerging blockchain technologies. Driven by government initiatives and a growing fintech ecosystem, Kuwait is witnessing increased adoption of blockchain for secure, transparent, and efficient financial services. The Kuwait FinTech Blockchain market is projected to grow significantly between 2025 and 2031, supported by application providers, infrastructure developers, and middleware firms across banking, insurance, and non-banking financial. Key trends include the rise of digital payments, Artificial Intelligence AI-enhanced customer experiences, and blockchain-based compliance tools. This momentum positions Kuwait as an emerging player in the Gulf’s onchain finance landscape.
Kuwait onchain finance ecosystem ( fintech startups, payment platforms, investment firms)
Provider | Role in Onchain Finance | Notable Initiatives |
Gulf Investment Corporation (GIC) | Regional investment firm exploring blockchain for asset management and finance | Active in digital transformation and regional fintech collaborations |
UPayments | Fintech startup offering simple, scalable payment solutions | Raised funding from Qatar FinTech Hub Accelerator; supports digital commerce |
Tap Payments | MENA-wide payment gateway simplifying transactions for businesses and individuals | Offers blockchain-ready infrastructure for secure digital payments |
KFIC Finance | Financial services firm with expertise in retail, commercial finance, and asset management | Provides customized financial solutions with potential for blockchain integration |
Qatar FinTech Hub (Investor) | Supports regional fintechs including Kuwaiti startups | Invested in UPayments and other blockchain-enabled platforms |
These providers are contributing to Kuwait’s gradual shift toward blockchain-powered financial services, especially in payments, asset management, and digital finance.
Growth of Onchain Finance in Lebanon
Onchain finance in Lebanon is growing out of necessity, as citizens seek alternatives to the Lebanese banking system and to address challenges posed by the devalued national currency. Between 2019 and 2023, the Lebanese pound lost over 90% of its value, and banks imposed severe withdrawal limits, leaving millions without access to their savings. In response, stablecoins, digital currencies pegged to the United States US dollar, have emerged, enabling people to preserve value, send remittances, and transact without relying on traditional intermediaries. The adoption of blockchain-based finance is reshaping Lebanon’s financial landscape, with digital wallets, fintech platforms, and informal crypto networks. While regulatory clarity remains a challenge, the demand for decentralized and resilient financial tools continues to drive innovation in Lebanon.
Lebanon Onchain finance ecosystem led by fintech startups and software firms
Provider | Role in Onchain Finance | Notable Initiatives |
Bluering | Credit automation and risk management software | Offers digital credit solutions for banks and financial institutions |
PinPay | Digital payments and mobile money services | Enables secure online transactions and merchant payments |
Letsgrant | Consumer lending and financial services | Provides fintech tools for digital credit and lending |
Globivest | Private investment firm supporting fintech innovation | Invests in blockchain-enabled financial platforms |
Neopay | Mobile payment and wallet solutions | Facilitates peer-to-peer and merchant transactions |
These companies are helping to fill the gap left by Lebanon’s traditional banking sector, offering blockchain-based alternatives for payments, lending, and financial access.
Future of Onchain Finance
The future of onchain finance globally and in Arab countries is poised for transformative growth, driven by technological innovation, shifting regulatory landscapes, and rising demand for decentralized financial alternatives. Globally, onchain finance is evolving from speculative crypto trading into a foundational layer for programmable money, tokenized assets, and real-time financial infrastructure, with young generation (Gen Z) and Millennials leading adoptionmul. In the Arab world, particularly the Gulf Cooperation Council (GCC) countries, governments are embracing blockchain to diversify economies and reduce reliance on traditional monetary systems. The Middle East and North Africa (MENA) region has already captured over $338 billion in onchain value, with institutional activity dominating the space. As regulatory clarity improves and digital identity frameworks mature, Arab nations are expected to become hubs for Sharia-compliant DeFi, cross-border payments, and tokenized trade finance, positioning the region as a key player in the global onchain economy. Onchain finance is unlikely to fully overtake traditional finance, but it is rapidly reshaping its foundations by introducing programmable infrastructure, tokenized assets, and real-time settlement. The future points toward convergence rather than replacement.
Road Ahead For Arab Banks to Embrace Onchain Finance
Arab banks should proactively embrace onchain finance by integrating blockchain infrastructure into their core operations, starting with tokenized payments, digital identity verification, and smart contract-based lending. By collaborating with regional fintech hubs and regulatory sandboxes, Arab banks can pilot Sharia-compliant DeFi products, streamline cross-border transactions, and enhance transparency in asset management. Investing in blockchain talent and public education will be key to building trust and usability. As Gulf nations push toward digital economies, early adoption of onchain finance will position Arab banks as leaders in innovation, resilience, and financial inclusion across the MENA region.
