Following the success of its central bank digital currency (CBDC) project with the UAE Central Bank back in 2019, the Saudi Central Bank (SAMA) has confirmed that it is currently working on domestic wholesale CBDC use cases in close collaboration with local banks and fintech companies.
That being said, the Saudi regulator noted that it has yet to make a final decision regarding the introduction of CBDC in the Kingdom, although it continues to study the benefits and potential risks of CBDCs.
During this phase of the project, SAMA will evaluate the economic impact, market readiness and potential applications of a CBDC-based payment solution. It also intends to review policy, related legal and regulatory considerations governing CBDCs.
Without revealing the names, SAMA Governor Fahad Almubarak said that the apex bank has engaged local banks, fintech companies as well as third-party consulting firms and technology providers and other market participants to better understand CBDC’s functionality and to test various design options.
SAMA in 2019 concluded Project Aber, a one-year initiative with its counterpart in the UAE to explore the possibility of the issuance of a new dual-issued digital currency as a unit of settlement between commercial banks in the two jurisdictions as well as domestically.