The Saudi Central Bank is running tests on a domestic wholesale digital currency in collaboration with local banks and fintechs.
The project is in line with several central banks CBDC initiatives across the globe and as part of the Saudi Arabian Monetary Agency's (Sama) ongoing research and experimentation on CBDC.
During this phase, the project will explore CBDC economic impact, market readiness, and potential robust and fast applications of a CBDC-based payment system.
In addition, the central bank is aiming to get a handle on policy, legal and regulatory considerations before moving to the next phase.
The Governor of Sama Fahad Almubarak says that it has engaged both local banks and fintechs, as well as other market players and third party consulting and technology providers, to gain a better understanding of CBDC's functionality and to test various design options.
Sama in 2019 successfully conducted CBDC experiment 'Project Aber' in collaboration with the Central Bank of the UAE to examine whether distributed ledger technology could contribute to seamless cross-border payments.
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.