On Monday, the Saudi Arabian Monetary Authority (SAMA) said it was continuing its central bank digital currency (CBDC) experiments with a focus on a national wholesale CBDC. In other words, to be used for payments between financial institutions, including banks and fintechs.

Its focus is to explore the economic impact, participant readiness, and potential for wholesale CBDC applications. At the same time, it is analyzing the political and legal implications.

The central bank confirmed that no decision has been made on the introduction of a CBDC.

While the current experiments are domestic, SAMA was one of the first central banks to explore cross-border payments with the UAE in 2019, Project Aber. It was a novel test because the central banks shared a common CBDC, which was workable since both Gulf currencies are pegged to the US dollar.

The UAE has become a participant in the MBridge Project, a cross-border CBDC project that also involves the central banks of Thailand, Hong Kong, and China.

Elsewhere in the Gulf, the Central Bank of Bahrain trialled JPMorgan’s JPM Coin digital currency solution in 2021.

Meanwhile, in 2020, SAMA used a blockchain solution to transfer money to local banks as part of efforts to inject liquidity into the banking system in the early days of COVID.