Saudi Arabia’s Central Bank (SAMA) is carrying out experiments with a central bank digital currency (CBDC) in cooperation with other local banks and fintech firms, the Saudi Press Agency (SPA) reported. The project is in line with measures taken by central banks around the world to issue widely accessible digital coins to ensure privacy and financial security.
Read more: The results are in: CBDCs are the way of the future
However, SAMA confirmed that no final decision had been made to launch such a digital currency in the Kingdom.
SAMA CBDC development is merely in its first phase. It notes that the Central Bank is set to “review policy, legal and regulatory considerations before moving to the next phase of the CBDC journey.” This aligns with the nation’s Saudi Vision 2030.
SAMA Governor Fahad Al Mubarak stated, “Local banks and payment companies will always be the cornerstone of this project and its implementation,” adding that the SAMA has already begun discussions with “both local banks and fintech firms, as well as other market players and third-party consulting and technology providers” throughout the CBDC development.
A CBDC is being considered by 112 countries, representing more than 95% of global GDP.
While 11 countries have already launched digital currencies, 14 others, including South Korea, Nigeria, Thailand, Sweden, China, and now Saudi Arabia, are conducting pilot programs.
The banks released a report on their findings in late 2020 concluding a dual-issued CBDC was technically viable for cross-border payments and presented “significant improvement over centralized payment systems in terms of architectural resilience.”
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