The Saudi Central Bank (SAMA) and the Central Bank of the United Arab Emirates (CBUAE) have announced the results of “Aber” Project. This initiative sought to explore whether distributed ledger technology could enable cross border payments between the two countries to be “reimagined”; reducing transfer times and costs between banks, using a new dual issued digital currency.
The Wholesale CBDC which was fully covered was issued by SAMA and the CBUAE, used only by them, and the banks participating in the initiative, as a settlement unit for domestic as well as cross-border commercial bank transactions between Saudi Arabia and the UAE. Over the course of a whole year, usage solutions were designed, implemented, and managed. The solutions, results, and main lessons learned were all documented in Project “Aber” Report. With the project outputs, the report aims to significantly enrich knowledge content in this field, in addition to laying the foundations for future work to be explored in the coming years.
The final results of the pilot project were consistent with the results of similar pilots conducted by a number of central banks. These results showed that the distributed ledger technology would enable central banks to develop payment systems at both local and cross-border levels. The project aims to work as a foundation for more studies and applications conducted by central banks and relevant international organisations, focusing particularly on various potential effects on monetary policies and the stability of the financial sector as well as the impact of various technical possibilities on organisational structures and the sector in general.
It was noted in the report that: “The name Aber was selected because, as the Arabic word for “crossing boundaries”, it both captures the cross-border nature of the project as well as our hope that it would also cross boundaries in terms of the use of technology.”
The results are believed to be beneficial to the central bank community and the financial system in general. Specifically, the report results are expected to contribute to developing clear perceptions of the potential of this technology and its applications to the financial sector.