Digital finance is gaining momentum across Gulf markets as token structures mature and regulated digital payment instruments see widespread adoption, according to a new global outlook from Moody’s Ratings.
The report states that the region is entering the most advanced phase of digital currencies, with blockchain-based infrastructure evolving from an experimental technology to a fundamental layer of financial market operations. This change has a significant impact on capital allocation, capital management and risk management across all Gulf banks and capital markets.
Moody’s highlighted the rapid growth of stablecoins and token deposits as a key driver. Globally, stablecoin payments will increase by 87 percent by 2025 and reach nearly $9 trillion annually, underscoring their growing role in payments, cross-border transfers and intraday liquidity management. These conditions of use are particularly important for the Gulf economy, which carries high rates of international trade, capital outflows and investment flows.
The report noted that shared digital infrastructure is beginning to blur traditional boundaries between different categories such as sovereign debt, sustainable finance and emerging market capital flows. Digital platforms now host US Treasurys tokens and structured debt products, opening new channels for Gulf-based investors to access global assets with faster payments and improved transparency.
Sustainable finance is also benefiting from digital innovation. Smart contracts can embed environmental performance metrics directly into green and sustainability-related tools, supporting consistent monitoring and disclosure. This is in line with the Gulf countries’ economic diversification strategies and energy transition strategies, where investor confidence and reliable reporting are essential.
Blockchain adoption is growing rapidly
Moody’s said blockchain infrastructure, coupled with artificial intelligence, is beginning to reshape asset servicing and collateral management. Early adopters of token issuance and blockchain settlement have reported reasonable operational benefits, although the agency cautioned that realizing full benefits will require continued investment in infrastructure and regulatory planning.
Industry plans suggest that more than $300 billion will be spent globally on technology markets by 2030, most of which will be directed toward data centers, communications, digital storage and collaboration tools. Gulf financial institutions are expected to play an increasing role in shaping institutional-level digital financial infrastructure as part of this investment cycle.
The agency warned that early adoption carries high risks. As more value moves to the digital channel, risks to smart contracts, storage layers and data feeds increase operational and cyber risks. Separation between blockchains and tokenisation platforms may also hinder liquidity if interoperability challenges are not resolved.
Looking ahead, Moody’s expects Gulf markets to favor an efficient, secure and interoperable digital financial infrastructure. Regulated stablecoins may gain prominence as a payment asset for token wallets and digital securities, while platforms that integrate seamlessly with traditional financial systems are likely to attract deeper liquidity and wider participation.
