Saudi Arabia’s Central Bank Digital Currency (CBDC) programme — the Digital Saudi Riyal — has expanded its domestic pilot from 6 to 20 participating banks, with the Saudi Central Bank (SAMA) simultaneously commencing cross-border payment testing with the UAE Central Bank’s Digital Dirham pilot under the joint Project Aber Phase 2 framework. The expansion marks a pivotal step toward commercial launch, with SAMA targeting a phased rollout to retail customers by Q1 2027.
What the Digital Riyal Actually Does
The Digital Saudi Riyal is a two-tier CBDC: SAMA issues digital currency to commercial banks, which then distribute it to businesses and consumers through digital wallets. The current Phase 2 pilot focuses on the wholesale layer — bank-to-bank settlement of interbank transactions and government payment flows — rather than direct consumer use. This approach mirrors the digital currency architecture chosen by the European Central Bank for its Digital Euro project and China’s e-CNY programme.
Key features of the Digital Riyal confirmed in SAMA’s Phase 2 progress report include: programmable money functions (allowing conditions to be attached to fund releases, for example releasing contractor payments only upon verified project completion), offline payment capability (for transactions in areas with limited internet connectivity), and full interoperability with the existing Saudi Payments Network (SARIE) for seamless conversion between digital and traditional SAR.
Project Aber: Saudi-UAE Cross-Border Testing
The cross-border element of the pilot — conducted with the UAE Central Bank’s cDirham — tests real-time settlement of trade invoices between Saudi and UAE businesses, eliminating the current two-to-three day settlement lag in bilateral SWIFT transfers. In the pilot’s first batch of 400 test transactions, settlement time averaged 4.7 seconds, with transaction costs approximately 80 percent lower than the SWIFT correspondent banking route.
For B2B companies with frequent Saudi-UAE payment flows — which include virtually every GCC logistics operator, contractor, and professional services firm — Digital Riyal to cDirham settlement represents a transformative efficiency gain. A typical inter-GCC payment currently costs between AED 25 and AED 120 in correspondent banking fees; the CBDC corridor is testing flat fees below AED 1 per transaction.
Timeline and Commercial Implications
SAMA’s roadmap indicates a phased retail launch in Q1 2027, starting with digital wallet distribution to Saudi nationals via the mobile banking apps of the 20 pilot banks. Cross-border retail use — enabling Saudi residents to pay UAE merchants directly in Digital Riyals settled in cDirhams — is targeted for Q3 2027. For international businesses operating across the Saudi-UAE corridor, this timeline means CBDC-ready treasury and payments infrastructure planning should begin during 2026 to avoid operational disruption at launch.
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