The Saudi Arabian Central Bank promotes CBDC plans
With countries around the world testing central bank digital currencies (CBDCs), Saudi Central Bank (SAMA) is taking its next steps. SAMA has focused on domestic wholesale CBDC use cases in partnership 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 rapid adoption of CBDC-based payment solutions will also be explored.
As the Saudi central bank continues testing with a goal of meeting its Saudi Vision 2030 goals, it plans to consider “political, legal and regulatory considerations” before proceeding with future CBDC testing.
HE 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 consultancies and technology providers. The central bank hopes to work with them to better understand CBDC functionality and test different design options.
In addition, SAMA also plans to consult with international bodies, local authorities and the public before implementing a CBDC. The Saudi Central Bank hopes to explore how a CBDC can enable innovation in the financial sector. It explained that it is interested in how a CBDC can contribute to a more “resilient payments ecosystem” and accelerate digital transformation.
Despite putting a number of plans and tests in place, the central bank emphasized 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.
The Saudi central bank wants to ensure innovation in the entire sector
SAMA also announced that it has granted licenses to two debt-based crowdfunding companies: For us and Tamed. Licenses were granted to fintechs after successful testing of 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 is another step towards ensuring that Saudi Arabia becomes a leading fintech country.
The news highlights SAMA’s aim to strengthen the financial sector across Saudi Arabia. The central bank explained that it looks set 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 compliance with the supervisory guidelines” offered by the central bank.
