Home CryptocurrencyAltcoin The Saudi Central Bank is still investigating CBDC, but no decision on deployment

The Saudi Central Bank is still investigating CBDC, but no decision on deployment

by SuperiorInvest

The Saudi Central Bank (SAMA) is accelerating its research into central bank digital currencies (CBDC), but will not announce the deployment yet.

On January 23rd bulletinThe bank said it is working on a phase of the project that “focuses on domestic wholesale CBDC use cases in collaboration with local banks and fintechs.”

However, she confirmed that no final decision has been taken to launch such a digital currency in the Middle East.

“SAMA emphasizes that while no decision has been made regarding the introduction of CBDC in the Kingdom, it remains focused on examining the benefits and potential risks of introducing CBDC.”

SAMA examines several aspects of a government-issued digital currency, including the economic impact, market readiness, and applications of a CBDC-based payment solution. It also intends to review policy, legal and regulatory aspects.

The move is part of Saudi Vision 2030, an initiative to reduce the kingdom’s dependence on oil, diversify its economy and develop public service sectors such as health, education, infrastructure, recreation and tourism.

According to the Governor of SAMA, HE Fahad Almubarak, local banks and payment companies will be significantly involved in the CBDC project and implementation.

The official picture of the Governor of SAMA, IS Fahad Almubarak. Image: ALONE

SAMA successfully conducted a CBDC experiment called “Project Aber” in 2019. In cooperation with the Central Bank of the United Arab Emirates (UAE), it explored whether blockchain technology could contribute to cross-border payments.

Banks published a report on their findings in late 2020 it concluded that dual-issued CBDC was technically viable for cross-border payments and represented “a significant improvement over centralized payment systems in terms of architectural resilience”.

Related: Survey reveals high penetration and adoption of cryptocurrencies in Saudi Arabia

No details were provided about the technology behind the Saudi CBDC, but CBDC Tracker suggests that it is based on the Linux Foundation’s Hyperledger Fabric.

According to the United States, I think thank you Atlantic CouncilCurrently, CBDC is fully deployed in 11 countries and pilot projects are running in 17. Most of those that have started operations are in the Caribbean with the exception of Nigeria.

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