The Saudi Central Bank (SAMA) is ramping up its analysis into Central Bank Digital Currencies (CBDCs) but is but to announce a deployment.
In a Jan. 23 bulletin, the financial institution said it was working on a part of a mission that “focuses on domestic wholesale CBDC use cases in collaboration with local banks and fintechs.”
However, it confirmed there had been no ultimate decision to launch such a digital foreign money within the Middle Eastern nation.
“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 researching a number of features of a state-issued digital foreign money together with financial impression, market readiness, and the functions of a CBDC-based cost resolution. It additionally intends to overview coverage, authorized, and regulatory concerns.
The transfer is a part of Saudi Vision 2030, an initiative to scale back the Kingdom’s dependence on oil, diversify its financial system and develop public service sectors equivalent to well being, training, infrastructure, recreation, and tourism.
According to SAMA governor, H.E. Fahad Almubarak, native banks, and cost firms might be closely concerned within the CBDC mission and implementation.
SAMA efficiently carried out a CBDC experiment known as “Project Aber” in 2019. It labored in collaboration with the Central Bank of the United Arab Emirates (UAE) to look at whether or not blockchain expertise might contribute to cross-border funds.
The banks launched a report on their findings in late 2020 concluding a dual-issued CBDC was technically viable for cross-border funds and offered “significant improvement over centralized payment systems in terms of architectural resilience.”
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No particulars have been offered on the expertise behind the Saudi CBDC, but CBDC Tracker suggests it’s based mostly on the Linux Foundation’s Hyperledger Fabric.
According to the United States suppose tank Atlantic Council, there are at the moment 11 nations which have totally deployed a CBDC, and 17 are working pilots. Most of those who have launched are within the Caribbean aside from Nigeria.