Saudi Arabia’s Central Bank is focusing on embracing the new wave of cryptocurrencies. It is thinking of trying emerging technologies such as blockchain to execute financial activities.
However, it has ruled the speculations of phasing out cash in favor of digital payments. According to a central bank representative quoted in the report, one of the most crucial financial technologies under development is central bank digital currencies (CBDCs).
However, the kingdom does not intend to eliminate physical cash usage. The central bank was one of the first institutions in the world to test CBDCs, when it launched project Aber in 2019.
The project is a bilateral experiment with the United Arab Emirates to examine the use of digital ledgers on cross-border transactions.
According to an interview, Saudi Arabia aims to raise the proportion of electronic payments to 70% of the country’s overall volume by 2030. However, the kingdom wants to maintain cash transactions and accept paper and metal cash as a payment method.
As per the representative’s belief, the target will be achieved five years earlier by 2025. In addition, the United Arab Emirates is currently developing another cross-border CBDC project with China, Thailand, and Hong Kong.
Earlier this year, the Central Banks of China and UAE came together to become a part of the Blockchain-based CBDC payments project.
The project aims to focus on the capabilities of a DLT-based central bank digital currency on regional payments.