UAE-Saudi Arabia digital currency trial a success

dubai — Aber, the common digital currency launched by the Saudi Arabian Monetary Authority (Sama) and the Central Bank of the UAE, has proved to be a successful instrument in expediting financial settlements between the two countries, the ongoing experiments and research show.

In a joint statement, the apex banks said the Aber projec “is one of the first of its kind internationally at the level of central banks”.

The project sought to study, understand and evaluate the feasibility of issuing a digital currency for central banks (CBDC) “with a view to developing cross-border payment systems and reducing transfer times and costs between banks”, in addition to experimenting the direct use and the actual application of technologies such as blockchain and distributed ledgers, said the statement.

The wholesale CBDC was successfully used by central banks of both Arab nations and the lenders participating in the initiative as a settlement unit for domestic as well as cross-border commercial bank transactions between Saudi Arabia and the UAE. “Over the course of a whole year, usage solutions were designed, implemented, and managed. The solutions, results, and main lessons learned were all documented in the project Aber report,” the joint statement said.

Both apex banks expressed their satisfaction with the results, the visions shared and the valuable lessons learned, which were all documented. The final results of the pilot project were consistent with the results of similar pilots conducted by a number of central banks. These results showed that the distributed ledger technology would enable central banks to develop payment systems at both local and cross-border levels, the central banks said.