SAMA, the Saudi Arabian Monetary Authority, has recently tapped blockchain technology to execute money transfers and deposits. The step is part of the financial authority’s plan to keep up with the trend of digital currencies.
Keeping Up The Pace With Blockchain
The institution is about to put the relatively novel blockchain technology to the best use, to go with the flow alongside the digital financial world. SAMA has started a new chapter in its modern development, by deploying blockchain for recent money transfers with few local banks in the country.
The Saudi Arabian institution used a distributed ledger to deposit part of the liquidity that it had previously stated to be injected in the banking sector. It’s a kind-of-a logical step, part of SAMA’s efforts aimed at enhancing the banking sector’s ability to efficiently provide credit facilities.
As recently announced, the authority is on its mission to explore and experiment with emerging technologies, and being side by side with the global trends of central banks in assessing the influence of blockchain on the financial sector.
A Persistent Step Into The Digital Currency World
The announced initiation of blockchain technology for money transfers may be considered as a logical step in adopting the fintech culture in the country.
In 2019 SAMA announced the launch of the “Aber” project – a mutual digital currency with United Arab Emirates Central Bank (UAECB). Back then, the financial institutions of both countries clarified that the new digital product would be “for use in financial settlements between the Kingdom of Saudi Arabia and UAE through Blockchains and Distributed Ledgers technologies.”
The joint project terms included SAMA and UAECB’s agreement that the first stages will focus on developing the technical aspects. It was also stated that “the use of the currency will be restricted to a limited number of banks in each state. In case that no technical obstacles are encountered, economic and legal requirements for future uses will be considered”.
The pilot initiative was announced to aim at benefiting everyone locally and internationally as well, by giving the opportunity to execute remittances across borders.