The “domestic wholesale CBDC use cases” are at the centre of the new phase of the CBDC project.
The Saudi Central Bank (SAMA), which used to be called the Saudi Arabian Monetary Authority, keeps working on its central bank digital currency (CBDC) and has started a new phase of its project.
SAMA will work with local banks and fintech companies in this project phase to test the use cases of “domestic wholesale CBDC,” according to a press release from January 23.
Also, in the project phase that just started, SAMA wants to find out if the market is ready, what the economic effects of CBDC are, and if there are “potentially strong and fast applications of CBDC-based payment solutions.”
SAMA also wants to look at regulatory, legal, and policy issues before taking the CBDC project to the next stage. SAMA said it will try to ensure that its CBDC project “helps to reach the goals of Saudi Vision 2030.”
It’s important to note that Saudi Arabia’s Vision 2030 plan aims to diversify the economy, make the country less dependent on oil, and improve education, health, tourism, infrastructure, and recreation.
The head of SAMA, H.E. Fahad Almubarak, said that local banks and payment companies will always be a big part of making and using CBDC. Still, the Governor of SAMA said that many local banks, fintech companies, market players, and third-party technology providers are actively testing different CBDC design options.
In the press release, the Saudi Central Bank said that regulators have not yet decided whether or not to let CBDC startup.
SAMA says that no decision has been made about whether or not to implement CBDC in the Kingdom, but it is still looking into the benefits and possible risks of doing so.
Even so, SAMA says that the project “will help SAMA make more informed decisions and help the central banking community explore CBDC.”
The Saudi Central Bank isn’t the only bank testing its central bank digital currency in different ways. The Central Bank of the Republic of Turkey finished its first set of tests for its CBDC at the end of December.