Project Aber was created by the central banks of Saudi Arabia and United Arab Emirates to explore domestic and cross-border settlement using a single regional currency. The technical partner was IBM IBM -0.8%.
The project name “Aber”, in Arabic, is a wanderer, one who crosses borders as if they are not there, it also means an interpreter of dreams and visions. A very appropriate name for such a cross-border project that is exploratory and visionary. A full report is available for those interested in the details of the project. The participants were the two central banks and six commercial banks, three from each country.
Three use cases of increasing complexity were tested. Real money was involved. A sketch of the use cases with glimpses of the technical architecture is given below. The learnings from the project and analysis of conformance of Aber to global standards for payment systems are laid out. Possible future steps are discussed. Alternate pathways are suggested, which are not in the original report.
Aber Is Special
Aber is the first dual issued wholesale Central Bank Digital Currency (CBDC) pilot implemented on distributed ledger technology (DLT or blockchain). What distinguishes Aber from all other CBDC pilots in the news are the fact that two central banks and six commercial banks from both countries were involved in the project; further, real money was used. The two central banks involved are Saudi Central Bank (SAMA) and Central Bank of United Arab Emirates (CBUAE). They have a close cultural and financial relationship.
The use of real money focused attention on security. The wholesale CBDC was based on the Saudi Riyal (SAR) and the Emirati Dirham (AED), the wholesale CBDC was a new animal which could be called ABR, which is not the official currency code but is used throughout the rest of the article to distinguish it from Riyals and Dirhams. SAR and AED are pegged to the US Dollar (USD), ABR was derived at a fixed rate to either of its progenitors (SAR or AED) and remained at a fixed rate to convert to either.
