Tuesday, February 7, 2023
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Saudi Arabia’s Central Bank Halt Plans To Launch CBDC

The Saudi Arabian Monetary Authority (SAMA) has not yet disclosed any plans to use central bank digital currencies (CBDCs), although they are increasing their research into the issue. The bank announced that 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 that was issued on January 23. 

However, it was revealed that there had been no final decision made to introduce such a digital currency in the Middle Eastern country.

SAMA is doing research into a number of features of a state-issued digital currency, including the applications of a CBDC-based payment system as well as the influence on the economy, market preparation, and market readiness. In addition to this, policy, legal, and regulatory aspects are going to be examined.

This action is being taken as part of Saudi Arabia’s Vision 2030 programme, which aims to lessen the Kingdom’s reliance on oil, diversify its economy, and expand public service industries like healthcare, education, infrastructure, leisure, and tourism. According to the governor of SAMA, H.E. Fahad Almubarak, local banks and payment businesses would play a significant role in both the development and execution of the CBDC initiative.

In 2019, SAMA was able to carry out the CBDC experiment known as “Project Aber” with flying colors. It conducted its investigation in tandem with the Central Bank of the United Arab Emirates (UAE), with the goal of determining whether or not blockchain technology may play a role in international financial transactions.

Late in the year 2020, the banks published a report detailing their research and coming to the conclusion that a dual-issued CBDC was technically viable for facilitating cross-border payments and presented a “significant improvement over centralised payment systems in terms of architectural resilience.”

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Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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