The Central Bank of United Arab Emirates (CBUAE) and the Saudi Arabia Bank (SAMA) have declared a successful pilot of their joint central bank digital currency (CBDC). After about two years of joint effort to create a dual CBDC, the UAE and Saudi Arabia are getting closer to an official launch of the digital currency.
In a joint report, the SAMA and CBUAE said:
“The project was successful in achieving its key objectives which include using a new DLT-based solution for real-time cross-border interbank payments between commercial banks without the need to maintain and reconcile Nostro accounts with each other. This promises to address the inefficiency and costs that are inherent in existing cross-border payment mechanisms.”
The UAE and Saudi Arabia have been working together to develop a CBDC that will cater to cross-border transactions between the countries’ commercial banks. Also, the vision was that the digital currency would sort the transactions using distributed ledger technology (DLT). At the time the initiative was launched in January 2019, it was named “Project Aber.”
In the recently-conducted pilot, six commercial banks participated, volunteering fiat currency for the test. The Daily Hodl said in a report that the banks also had internal nodes to ensure that commercial banks can perform peer-to-peer transactions without direct interference from central banks.
Furthermore, the SAMA and the CBUAE has further plans for Project Aber by improving its scalability.
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