CBDC Experiment Announced by Saudi’s Central Bank

The Saudi Arabian Central Bank announced its CBDC Experiment in a press release today. The statement mentions that the central bank intends to keep trying out different CBDC implementation scenarios.

The announcement stated the nation’s intention to keep looking into all relevant aspects of a CBDC. Noting in particular that “A phase of a project that causes on the domestic wholesale CBDC use cases in collaboration with local banks and FinTechs” is being worked on by the country’s central bank.

Saudi Experiment with CBDC

Saudi Arabia’s Central Bank (SAMA) has recently announced its plans to continue researching the potential of a Central Bank Digital Currency (CBDC). This comes after the successful launch of the “Project Aber” initiative in 2019, which was designed to explore the possibilities of a digital currency and how it could be used domestically.

The project is in line with measures taken by central banks around the world to issue widely accessible digital coins to ensure privacy and security. SAMA in the past hired Mohsen AlZahrani, formerly at Accenture, to lead its virtual assets and CBDC program in order to boost its digital ambitions. SAMA is engaging with international bodies, local government entities and the public to make sure any CBDC implementation would be beneficial for all parties involved. This includes making sure that any potential implementation would adhere to regulations and standards set forth by international organizations such as the Bank for International Settlements (BIS).

Additionally, it was stated in the press release that SAMA H.E. governor Fahad Almubarak had promised that “Local banks and payment companies will always be the cornerstone of this project and its implementation.” On the other hand, it claims that throughout the CBDC’s development, it has already initiated communication with “…both local banks and fintechs, as well as other market players and third-party consulting and technology providers.”

Conclusion

This latest announcement is an important milestone in Saudi Arabia’s journey towards potentially launching a CBDC. With continued research and consultation, it may not be long before we see a full-fledged CBDC in the country.

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