The Saudi Central Bank (SAMA) continues to explore and research use cases of central bank digital currencies (CBDCs), however, there has been no plan for deployment yet.
The bank said it was working on a phase of a project that “focuses on domestic wholesale CBDC use cases in conjunction with local banks and fintechs” in a bulletin published on January 23.
It did, however, disclose that there had been no decision made with regard to the Middle Eastern country’s introduction of such a digital currency.
“SAMA stresses that although no decision has been made regarding the introduction of CBDC in the Kingdom, it continues to focus on exploring the benefits and potential risks of implementing CBDC.”
SAMA is looking at the market viability, economic effect, and potential uses of a CBDC-based payment system for a state-issued digital currency. In addition, policy, legal, and regulatory aspects will be reviewed.
The action is a part of Saudi Vision 2030, a plan to diversify the Saudi economy, lessen the country’s reliance on oil, and expand public service industries including health, education, infrastructure, leisure, and tourism.
Local banks and payment businesses would be significantly engaged in the CBDC initiative and execution, according to SAMA governor H.E. Fahad Almubarak.
In 2019, SAMA carried out the CBDC experiment known as “Project Aber” with success. The Central Bank of the United Arab Emirates (UAE) collaborated to investigate the potential benefits of blockchain technology for international payments.
The banks published a report on their results in late 2020, with the conclusion that a dual-issued CBDC was technically feasible for international transfers and offered “substantial architectural resilience improvements over centralized payment systems.”
The Saudi CBDC’s technology was not disclosed in full, but according to CBDC Tracker, it is built on the Hyperledger Fabric developed by the Linux Foundation.
According to the American think tank Atlantic Council, 11 nations have CBDCs completely implemented at this time, while 17 more are conducting pilots. Except for Nigeria, the majority of those that have started are in the Caribbean.