During the live IMF (International Monetary Fund) Seminar hosted by Kristalina Georgieva, Managing Director of IMF on the topic of Cross-Border Payments—A Vision for the Future, Dr. Ahmed Abdulkarim Alkholifey, Governor of the Saudi Arabian Monetary Authority (Central Bank of Saudi Arabia) talked about the experience of the ABER DLT CBDC project that was initiated between the Kingdom of Saudi Arabia and UAE in 2019.
As he explained, “We used the CBDC (Central Bank Digital Currency) project which we called ABER between UAE Central bank and SAMA to explore the wholesale CBDC in application as a single currency for cross border settlements. We worked with 6 commercial banks, three from each country and the initiative was mainly to investigate and capture potential uses and challenges.”
As he explained, “We found that the technology is intact and viable for cross border wholesale payments. We can leverage DLT (Distributed Ledger Technology) especially when it comes to using fiat money and creating its equivalent amount in digital currency between counter parties. We learned how digital currency could be managed, and which core banking systems would be impacted as we tested its feasibility.”
According to AlKholifey, one of the main insights is the need to build capabilities and knowledge resource pool as well as economic policy considerations for capital movements and financial sector stability which he said need to be explored further.
He added, “The ABER project presented good opportunities for commercial banks that are key stakeholders and allowed us to work first hand with DLT based wholesale CBDC. We believe CBDC is a topic worth exploring further as it can improve architectural resilience and lead to improvements in security holes for a safer efficient payment system.”
And as Saudi Arabia is hosting the G20 meeting next October, AlKholifey stated that Saudi will try to establish a clear roadmap to enhance cross border payments.