The Central Bank of Saudi Arabia (SAMA) continues its experiments with Central Bank Digital Currency (CBDC).
SAMA has announced Press release Earlier in the week it said it was continuing its research into CBDC but did not say anything about its deployment. The bank’s press release said it is working on a project that “focuses on domestic wholesale CBDC use cases in collaboration with local banks and fintechs.” The bank, however, reiterated that it has not reached any definitive decision to launch a CBDC:
SAMA emphasizes that although no decision has been made regarding the introduction of CBDC in the state, it continues to focus on exploring the benefits and potential risks of CBDC implementation, which will contribute to informed decision-making within SAMA and CBDC explorations within Central. Banking community.
The central bank further said that it will examine the economic impact of CBDC implementation and its market readiness and rapid applications of CBDC-based payment solutions. SAMA said it would continue to test the viability of a CBDC to achieve its Saudi Vision 2030 objectives but would consider “policy, legal and regulatory considerations” before proceeding with the project.
The governor of Sama, Hey Fahad Al Mubarak, said that local banks and payment companies will be the foundation and implementation of the project. He added that SAMA had reached out to local banks and fintechs, along with other market players and third-party consulting and technology providers, to comprehensively understand the functionality of such a currency and test various design options.
The press release also added:
SAMA is prepared to continue its research on CBDC in consultation with relevant international bodies, local government bodies and the public. Additionally, SAMA will continue to use CBDC solutions as an infrastructure enabler of innovation in financial services that has the potential to contribute to a more flexible payments ecosystem and accelerate digital transformation in the local financial sector.
SAMA successfully used CBDC in 2019 in collaboration with the Central Bank of the UAE to explore how distributed ledger technology, or blockchain, “could contribute to seamless cross-border payments”. The experiment was named “Projects Aber”.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.