The central bank of Saudi and the UAE’s central bank is piloting a central bank digital currency, named Aber. A current 90 pages report says Aber, a yearlong proof of concept digital currency pilot, has shown significant improvement over centralized payment systems. They further stressed the importance of the project in fostering domestic and cross-border bank settlement.
The pilot project, Aber, officially kicked off last year, 2019, as an “Azzam”, a strategic agreement to boost bilateral trades and banking settlements between the two Arab nations.
According to the report overview, “The name Aber was selected because, as the Arabic word, for ‘crossing boundaries,’ it both captures the cross-border nature of the project as well as our hope that it would also cross boundaries in terms of the use of the technology,”
The ongoing research project considers a series of blockchain; private and public. At its initial stage, it has since scrapped the use of Ripple, Stellar, and other public permssionled networks.
According to the report,
“Note that public blockchain protocols such as Ripple and Stellar (XLM, -3.55%), which are often positioned for cross-border remittance use cases, were ruled out because of the obvious need for permissioning and privacy for an interbank payment use case (which these protocols didn’t support),”
Instead, they are considering the Linux Foundation and IBM’s Hyperledger Fabric, JP Morgan Quorum, R3 Corda, and similar enterprise-grade blockchain. By implication of blockchain choice, Aber will be an open-source, private, permissioned blockchain designed to foster domestic and cross-border banking settlements between user nations.
While the project is getting materialized, sources say there is room for improvement, especially privacy and security. However, one green light so far is that the projects have shown tremendous digital and distributed technologies over centralized banking.