The central banks of two of the most powerful economies in the Middle East today released a report on a joint year-long project for a central bank digital currency (CBDC).and the results speak clearly in favor of blockchain technology.
First announced in January 2019, The Aber project was a joint effort by the United Arab Emirates and Saudi Arabia to establish a “Proof of Concept”. designed to “contribute to the knowledge base on CBDC and DLT technologies”.
The joint effort of two central banks in such a study is one of the first of its kind. To this end, The report notes that the choice of the name “But” relates to the main objective of the project::
“Surname But was chosen because, like the Arabic word, “crossing borders”, captures both the cross-border nature of the project and our hope that it will also be cross-border in terms of technology deployment“.
The report is divided into three phases, which gradually expand the scope of the experiment to six different commercial banks in the The project used a digital currency backed by real money to “pay more attention” to security issues and existing payment systems.
The report concludes that a two-issue CBDC was “not only technically feasible” for cross-border payments, but also CBDCs represent “a significant improvement over centralized payment systems in terms of architectural strength”.
Finally, The Aber project overcame all obstacles:: “All basic requirements have been met […], including complex requirements for data protection and decentralization, as well as in connection with the reduction of economic riskslike the visibility of the money supply by the central bank and the traceability of the currency issued “.
The report recommends a number of next steps for research and policy, including the introduction of DLT to improve the security of existing systems., “Offering a DLT-based payment method” and expanding the scope of future Aber Project attempts to geographically dispersed partners as well as the liquidation of other assets such as bonds or promissory note loans.
Although no one has put up as much resistance as Project But, Other central banks have also been researching the profitability of CBDCs in recent months. Recently, China released regulatory guidelines legitimizing a digital yuan, the UK has also started drafting a draft regulation and propose the investigation of a possible CBDC, and the Brazilian Minister of Economic Affairs has definitely stated that the South American superpower will have a CBDC.
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