Merits of using digital currencies in cross-border payments, specifically inter-Arab payments, were discussed on Monday by governors of Arab banks at a roundtable meeting on Central Bank Digital Currencies (CBDC) in Jeddah, western Saudi Arabia.
Many central banks in the Arab world have the infrastructure that enables them to launch digital currencies, especially the countries of the Gulf Cooperation Council (GCC).
GCC member states have proved they possess the tools and expertise needed in implementing digital currency programs. This was indicated by a survey conducted by the Arab Monetary Fund.
The survey found that 76% of 17 Arab central banks are studying the possibilities of issuing CBDCs.
In a speech at Monday's event, Saudi Central Bank (SAMA) Governor Fahad Al-Mubarak highlighted the need of the financial sector tapping into all information technology, including artificial intelligence and digitization.
The Fourth Industrial Revolution brought about emerging technologies and innovative work models that could help the financial sector reduce costs and offer better service, Al-Mubarak pointed out.
Urging the central banks to make better use of the new technologies to revitalize the Arab economies, he said these banks should take stock of the distinctive needs and characteristics of each country while issuing digital currencies.
He also suggested analyzing the possible impacts of issuing a digital model of sovereign currencies and conducting the necessary tests with a view to better understanding of future policies and legislations.
Abdulrahman Al Hamid, who currently serves as Director General Chairman of the Board in the Arab Monetary Fund, noted that there is an accelerating pace of digitization of financial services.
Digitization, according to Al Hamid, is largely driven by innovation in financial infrastructures, the use of distributed records technology, and the provision of various aspects of digital currencies to central banks.
