Saudi Arabia Central Banks Reveals CBDC Experiment

By Kevin • January 30, 2023 3:47 pm • Comments

The Saudi Arabia Central Bank is the latest central bank in the world that has been researching the benefits of implementing a central bank digital currency.

The central bank has also revealed that they will be working with fintech companies and other financial entities to determine the best way to implement a CBDC.

The announcement is not a surprise for some investors as the Middle East region has turned out to be a region that as created a regulatory environment that is very welcoming for crypto firms with the city of Dubai being in the lead.

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At the moment, the central bank has not yet revealed if they will be using any particular blockchain for creating the CBDC.

The long term vision of the plan is to hopefully finalize CBDC development by the year 2030 assuming that the experiment is successful with local banks and companies.

Watcher.guru reports:

However, the recently announced experimentation of the CBDC development is merely the first phase. It notes that the Central Bank is set to “review policy, legal and regulatory considerations before moving to the next phase of the CBDC journey.” This aligns with the nation’s Saudi Vision 2030.

Moreover, the press release noted SAMA H.E. governor Fahad Almubarak’s assurance that “Local banks and payment companies will always be the cornerstone of this project and its implementation.”

Conversely stating that it has already opened discourse with “…both local banks and fintechs, as well as other market players and third-party consulting and technology providers,” throughout the CBDC development thus far.

Saudi Arabia being open to CBDCs may have also been expected by some speculators due to the country’s recent willingness to do trading in other currencies besides the USD.

Many see this as the country’s effort to shift towards de-dollarization and the prominence of digital assets may be one of the major reasons behind this shift.

Of course, there may also be other contributing factors such as concerns over inflation for fiat currencies and this was evident during the discussion that the country’s representatives had at Davos 2023.

The change is quite big for the country as the nation has always had trade in USD for the past 48 years so this may have significant financial impacts on the world economy as well as the world of crypto.

Bitcoin.com concludes:

This week, the world’s elite met in the Swiss Alpine town of Davos for the 2023 World Economic Forum, and Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, spoke to Bloomberg TV on Tuesday. Al-Jadaan stunned reporters when he said Saudi Arabia is open to trading in other currencies.

“There are no issues with discussing how we settle our trade arrangements, whether it’s in the U.S. dollar, the euro, or the Saudi riyal,” Al-Jadaan said. The finance minister added:

I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world.

The Saudi Arabian finance minister’s statements have been interpreted as another step toward de-dollarization.

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