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Saudi Central Bank Progresses CBDC Plans

With countries all over the world testing central bank digital currencies (CBDCs), the Saudi Central Bank (SAMA) takes its next steps. SAMA has turned its focus on domestic wholesale CBDC use cases in collaboration with local banks and fintechs.

The next phase of SAMA’s CBDC project looks to test the economic impact of implementing a digital currency. Market readiness and fast applications of CBDC-based payment solutions will also be explored.

As the Saudi central bank continues testing with an aim to achieve its Saudi Vision 2030 objectives, it plans to consider “policy, legal and regulatory considerations” before continuing with future CBDC testing.

Fahad Almubarak
Fahad Almubarak, governor of SAMA

H.E. Fahad Almubarak, governor of SAMA, explained in a statement that local banks and payment companies will become a cornerstone of the project. SAMA has already engaged with local banks, fintechs, third-party consulting and technology providers. The central bank hopes to collaborate with them to better understand the CBDC’s functionality and test different design options.

Additionally, SAMA also plans to consult with international bodies, local government entities and the public before implementing a CBDC. The Saudi Central Bank hopes to explore how a CBDC could enable innovation in the financial services sector. It explained it is interested in how a CBDC could contribute to a more “resilient payment ecosystem” and accelerate digital transformation.

Despite putting a number of plans and tests in place, the central bank emphasised that it has not made any final decisions to officially introduce a CBDC to Saudi Arabia. Before this becomes possible, SAMA looks to further explore both the benefits and potential risks of a CBDC.

Saudi Central Bank looking to ensure innovation throughout the sector

SAMA also announced that it has given licences to two debt-based crowdfunding companies: Forus and Tameed. Licences were given to the fintechs following successfully testing their respective solutions in SAMA’s regulatory sandbox.

The sandbox is an experimental environment designed to accelerate the innovation of financial products and services in Saudi Arabia. SAMA explained that the news becomes another step towards ensuring Saudi Arabia becomes a leading fintech country.

The news highlights the aims of SAMA to strengthen the finance sector across Saudi Arabia. The central bank explained that it looks to become an attractive place for innovators and investors. It hopes that encouraging more innovative companies to come to Saudi Arabia will ensure the sector becomes more valuable.

SAMA also stressed the importance of ensuring “full adherence to the supervisory guidelines” offered by the central bank.

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