The Central Bank of Saudi Arabia announced the continuation of the project to test the digital currency of the central bank, as it is currently working in cooperation with banks and financial technology companies operating in the Kingdom on one of the stages of the project, concerned with studying cases of using the digital currency of the central bank allocated to financial institutions locally.
This project comes in line with many central bank initiatives globally in the field of central bank digital currencies, and is one of the continuous efforts of the Saudi Central Bank to study and test the central bank digital currency.
The Saudi Central Bank stated in a statement that it is examining at this stage the economic impact, market readiness, and possible effective and rapid applications for payment solutions using the central bank’s digital currency.
The Central indicated that issues related to policies, legal and regulatory aspects were considered before moving to the next stages of the project, in order to contribute to achieving the goals of the Kingdom’s Vision 2030.
The Governor of the Saudi Central Bank, Fahd bin Abdullah Al-Mubarak, stated that local banks and payment companies are an indispensable cornerstone of this project and its implementation, referring in this regard to the involvement of local banks and financial technology companies in the current stage of the project.
Al-Mubarak stressed that the current stage also aims to involve other players in the market, and third-party advisory and technical service providers, with the aim of identifying more broadly the functions of digital currency, and testing various design options.
The bank will continue to study the central bank digital currency, while consulting with relevant international bodies, local government agencies and the public. The Central Bank will also continue to test the digital currency, given that it is one of the possible infrastructure elements that support innovation in financial services, in addition to the possibility of the digital currency contributing to strengthening the payment system and accelerating digital transformation in the financial sector in the Kingdom.
The bank confirmed that no decision had been taken regarding the start of using the digital currency for the central bank in the Kingdom, but it continues its work and is currently focused on exploring the potential benefits and risks of using digital currency, which will undoubtedly contribute to taking considered decisions within the Central Bank of Saudi Arabia, and will enrich the global results related to the use of digital currency. These currencies are at the level of central banks.
It is worth noting that the Saudi Central Bank previously succeeded in testing the central bank’s digital currency through the “Aber” project in 2019, which is an initiative launched in cooperation with the Central Bank of the United Arab Emirates. To investigate the extent to which distributed ledger technology can be used to facilitate cross-border payments.