Saudi Arabia’s central bank is experimenting with emerging technologies like blockchain for the finance sector, but doesn’t intend to phase out cash in favor of digital payments, according to an interview with local newspaper Al Eqtisadiah.
Central bank digital currencies (CBDCs) are one of the most important financial technologies under development, but the kingdom does not intend to phase out the use of physical cash, according to a central bank representative quoted in the report.
The central bank was one of the first in the world to experiment with CBDCs back in 2019 when it announced project Aber, a bilateral experiment with the U.A.E. to test the use of digital ledgers on cross-border transactions.
Saudi Arabia is trying to increase the proportion of electronic payments to 70% of the country’s total by 2030, but the kingdom wants to ensure continuity of cash transactions and the availability and acceptance of paper and metal cash as a means of payment, according to the interview.
The representative said the target is likely to be achieved five years earlier, in 2025.
The U.A.E. are now working on another cross-border CBDC project with China, Thailand, and Hong Kong.