The Saudi Arabian Monetary Authority (SAMA) is intensifying its investigation into central bank digital currencies (CBDCs), though it has yet to reveal any plans to implement such a currency.

The bank announced that it was working on a phase of a project that “targets national wholesale CBDC use cases together with local banks and fintechs” in a newsletter that was issued on Jan. 23.

However, it was revealed that no final decision had been made to introduce said digital currency into the Middle Eastern country.”

SAMA emphasizes that despite the fact that no decision has been made on the implementation of CBDC in the Kingdom, it continues to focus on investigating the advantages of introducing CBDC, as well as the potential dangers associated with doing so.”

SAMA is investigating numerous areas of a state-issued digital currency, including applications of a CBDC-based payment system, the economic effect of the currency, and market readiness.

In addition to this, it plans to examine relevant legal, policy and regulatory aspects.

This action is being taken as part of Saudi Arabia’s Vision 2030 program, which aims to decrease the kingdom’s dependence on oil, diversify its economy, and expand public service industries such as health, education, infrastructure, leisure, and tourism by the year 2030.

SAMA Governor HE Fahad Almubarak said that local banks and payment companies will play an important role in the CBDC project and its implementation.

In 2019, SAMA was able to carry out the CBDC experiment known as “Aber Project” with great success.

It conducted this research in conjunction with the Central Bank of the United Arab Emirates to determine whether blockchain technology can play a role in international financial transactions.

In late 2020, the banks published a report detailing their research and concluding that a dual-issue CBDC was technically feasible for facilitating cross-border payments and presented a “significant improvement over centralized payment systems in terms of architectural resilience”. “

There is no information available about the technology behind the Saudi CBDC; however, CBDC Tracker implies that it is built on top of the Hyperledger Fabric developed by the Linux Foundation.

The Atlantic Council, a US-based think tank, reports that there are currently 11 countries that have fully implemented a CBDC and 17 countries that are conducting pilot tests.

The vast majority of those that have already started operations are in the Caribbean, with the exception of one in Nigeria.