Saudi Riyal Digital

Amid growing interest by the countries of the world, especially the Gulf countries, in future forms of money, the Kingdom of Saudi Arabia has joined a major, cross-border experiment led by the Bank for International Settlements for digital currencies of central banks and under the move announced on Wednesday, June 06, 2024, the Saudi central bank will be a “full participant” in the EM project. Bridge, a collaboration launched in 2021 between the central banks of China, Hong Kong, Thailand and the UAE.

The digital transformation in the kingdom is taking a new turn amid a spree in the digitisation of the payments scene with the adoption of the Saudi central bank for the transition to electronic payments, to highlight the talk about why joining at this time, this step apparently comes towards reducing the global oil trade in US dollars.

The growing interest in digital currencies by the countries of the region and the world coincides, so that more than 90% of the money in circulation today is in digital form according to the Harvard Business Review Report, and many countries have taken a proactive step to keep pace with the accelerated global developments in this field, the most recent of which was the launch of the Qatar Central Bank in June 2024, the digital currency project after the completion of the infrastructure development of the project, and entered into its first experimental phase extended to October 2024, the Central Bank of the UAE announced earlier that it will start working with India regarding the feasibility of the digital dirham, and China to price oil transactions in yuan, an effort that may be strengthened by a swap agreement In March 2023, China settled gas trade with the UAE in yuan for the first time, and Russia and Iran, which are under extensive Western sanctions, are seeking to get rid of the US dollar in bilateral trade.

There are many expected benefits that countries can benefit from by modernizing existing financial systems, introducing digital currencies affiliated to central banks, reducing transaction costs and times, speeding up international transactions, and enhancing financial inclusion .

 In October 2020, the group of twenty, under the chairmanship of the kingdom of Saudi Arabia, agreed on a roadmap to enhance global cross-border payments to make payments faster, cheaper, more inclusive and transparent, and the roadmap called for an assessment of the proposed local designs of digital currency for several central banks and experiments on the feasibility of using it in settling cross-border payments.

Perhaps one of the last benefits of digital currencies for central banks is to counter the illegal activity of individuals and organizations, through money laundering and cash flows in the financing of terrorism.