• The Saudi Central Bank (SAMA) recently unveiled its plan to experiment with central bank digital currency (CBDC)
• The central bank is exploring the economic impact, market viability and potential application of CBDC-based payment solutions
• The SAMA has yet to make a decision on the launch of the centrally-backed currency and is devoting its research to informed decision-making
The Saudi Central Bank (SAMA) has announced its plan to experiment with a central bank digital currency (CBDC) alongside other local banks and fintech firms in a phased project. SAMA intends to use the CBDC to act as a useful tool for a type of domestic wholesale financial instrument, and is currently exploring the economic impact, market viability, and potential application of CBDC-based payment solutions.
SAMA has yet to make a decision on the launch of the centrally-backed currency, but is devoting its research to informed decision-making within the central banking ecosystem. SAMA is currently collaborating with local banks and fintech firms to identify and understand the benefits and possible risks of implementing CBDC.
The CBDC project is a major step toward the adoption of digital assets by the Saudi Central Bank. If successful, it would pave the way for other central banks to begin experimenting with digital assets, as well as give confidence to the public that digital assets are safe to use.
In addition, SAMA is also exploring the potential of using digital assets to facilitate fast and secure cross-border payments and remittances. This could be a major breakthrough, as the current international payments infrastructure is slow and expensive. By leveraging digital assets, SAMA could increase the speed, efficiency, and security of international payments and remittances.
At the same time, SAMA is also looking into ways to use digital assets to help improve its financial surveillance capabilities. This would enable the central bank to better monitor financial activities, detect suspicious transactions, and combat money laundering and financial fraud.
In short, the Saudi Central Bank’s CBDC experiment could be a major breakthrough for the adoption of digital assets and could lead to a new era of financial infrastructure. If successful, it would open the door for other central banks to begin experimenting with digital assets and could help to further strengthen the security and efficiency of payments and remittances.