Not too long ago, bankers and young tech workers crowded around dashboards to watch a pet project of the Saudi central bank: a digital currency that was meant to show that the country was moving into the future. These days, those dashboards are either hidden or gone completely. There are still a few charts in dusty folders, but the excitement has faded into quiet comments over late-night gahwa. The experiment hasn’t really failed. It just… stopped.
From a loud crypto lab to a quiet file in the backroom
There wasn’t a big press conference to announce the change at the Saudi Central Bank. It all started with meetings that were pushed back, pilot reports that took longer to look over, and risk memos that had more red ink than green. Some employees noticed that the CBDC task force, which was once the talk of the office, was no longer the talk of the office. The project code name was less common in email subject lines. A few foreign consultants had their contracts cut short and then not renewed. What had been set up as the next big step for Vision 2030 started to seem like an extra that no one really wanted to click on.
The beginning of the story was very different. In 2019, Saudi Arabia and the UAE worked together on the “Aber” project, which tested a shared digital currency for settling debts across borders. It was technical, niche, and proudly experimental. Officials from the central bank talked about efficiency, lower transaction costs, and piles of research papers. A few big local banks ran small tests, moving real money on private ledgers while being watched by regulators. Nothing crazy, nothing like public crypto. But the markets did notice. When talking about central bank digital currencies, analysts began to mention Riyadh alongside Beijing and Lagos. At first, the spotlight made me feel good. After that, it hurt.
The mood changed as more and more global crypto scandals came to light and regulators in Washington and Brussels got ready to take action. Saudi supervisors, who are naturally conservative, started to care less about headlines about new ideas and more about systemic risk, capital flows, and geopolitical scrutiny. The people in charge of money knew that a digital riyal, even in a small amount for wholesale, would raise questions they weren’t ready to answer. How easy would it be to follow each transaction? Who would be in charge of the flow of data? Where would cross-border settlements meet sanctions regimes and politics in the region? To be honest, no one wants the nervous markets to check their internal plumbing in real time. So, the phase of testing things out didn’t get cancelled. It was just wrapped in regulatory cotton wool and put on the shelf.
When the market suddenly becomes interested, regulatory friction happens.
Behind the scenes, the most important times often seemed small. The two groups were supposed to have a workshop on CBDCs, but it was pushed back twice and then turned into a more general “digital payments” event. A draft framework for holding digital currency went back and forth between legal and compliance teams, with each team adding cautious footnotes. Banks that had once bragged about being “early partners” quietly sent employees to less controversial fintech pilots, such as open banking APIs and instant payments. The word “experiment” started to sound risky inside. No one wanted to be the first to say that the digital currency phase was over on the outside. The silence got louder.
Of course, markets don’t like silence. When Saudi officials stopped talking about “future forms of money” in speeches, analysts started to read between the lines. People working on bond desks in Dubai and London talked to each other. Were the Saudis having technical problems, political problems, or both? Funds that focused on cryptocurrencies, which had once called themselves “ready partners” for any Gulf digital currency move, noticed the change in tone. Every time a small line in an IMF or BIS report talked about CBDC hesitancy, trading chats lit up. There was no proof for any of these rumours, but they made a story: regulatory friction was rising in the kingdom just as the rest of the world was paying more attention to anything with the words “digital” and “currency” in it. We’ve all been there when your side project suddenly seems too public.
The friction wasn’t just at home. Saudi Arabia is at the crossroads of oil markets, dollar funding, and fragile relationships in the region. A state-backed digital currency, even if it could only be used for bank-to-bank transfers, would bring up sensitive issues like sanctions, correspondent banking, and data sovereignty. After some high-profile crypto failures, Western regulators were already on high alert. They quietly signalled that they wanted more information before using new pipes to move Saudi money. At the same time, partners in the region had their own plans, experiments, and political limits. *In that mess, slowing down began to seem less like a retreat and more like managing risk. From a distance, it looks like a quiet leaving. From inside the machine, it feels like hitting pause on a tool that might cause more problems than it solves right now.
What Saudi’s “soft exit” really means and how to understand it
If you want to know what this means beyond the headlines, the easiest way to start is to ignore the buzzwords and look at the plumbing. You can tell that a central bank is really committed to a CBDC by looking at its budgets, new departments, and public deadlines. Today, none of that is going on in Riyadh. There isn’t a big push to hire a lot of blockchain engineers at the central bank. There is no set date for when even a small amount of the wholesale digital riyal will be available. The energy has instead gone into more traditional areas, like faster payments, better compliance tools, and better banking infrastructure. Go where the engineers go. That’s where the real money is.
A common mistake made by international investors and regional observers is to read too much into the silence as fear of technology itself. Saudi Arabia is still giving a lot of money to startups that work on AI, cloud infrastructure, and payments. What it is quietly backing away from is the political and regulatory baggage that comes with creating a new type of state money in a world that is already on edge. It’s also wrong to think that “never” means “never” when there is a shelved experimentation phase. Central banks work on long time frames and make short public statements. A project can be “cold” in politics for five years, but it can “thaw” overnight when things change. If anything, the Saudi move shows us that hype cycles move much faster than the institutions that are supposed to support them.
A senior banker from the Gulf, who asked to remain anonymous, put it this way:
“CBDCs looked cool when everyone wanted to show they weren’t stuck in the 1990s.” Now they look like a compliance nightmare in a shiny suit.
The plain-truth sentence hurt, but it rang true on trading floors. Three important filters help readers figure out what’s coming next:
- Pay attention to the tone of the rules. Are speeches and policy papers leaning toward trying new things or putting more emphasis on controls and oversight?
- Follow real-world pilots. Not just studies or MoUs, but also live tests with banks, even if they are small.
- Follow the regional chessboard: Saudi moves don’t happen in a vacuum; look at what the UAE, Qatar, and big players like China and the EU are doing.
These lenses tell a more real story than any one headline about “giving up” on trying out digital currency.
A quieter future for money, or just a long break?
It’s strange that Saudi Arabia is backing off from its CBDC experiment so softly. On one hand, global payment systems are getting better quickly. For example, they now have instant transfers, mobile wallets, and biometric authentication. On the other hand, the big promise of state digital currencies is suddenly running into worries about surveillance, capital controls, and geopolitical power. The kingdom seems to have decided that it can get 80% of the benefits for now by upgrading its current systems instead of issuing a full-fledged digital riyal, which would bring a lot of attention to the issue. That calculation makes sense in a financial culture that is very aware of risk.
But the question remains: what happens next when markets, regulators, and politics all put a lot of pressure on the same new financial idea? Some countries will move quickly in order to get a head start or have more control. Some, like Saudi Arabia today, will wait, learn, take what works, and throw away the rest. For readers who are following this story from a distance, the most interesting part isn’t the digital currency project itself, but the changing line between “innovation” and “too much visibility.” The real story about the future of money in the Gulf may not be a big launch of a new coin, but a series of quiet decisions about which experiments are worth the regulatory heat and which ones are easier to let fade away.
Main point: Detail: Value for the reader
| Main point | Detail | Value for the reader |
|---|---|---|
| The Saudi CBDC phase has cooled down. | Public pilots stopped, internal teams were moved around, and there wasn’t much new communication. | Shows a careful approach instead of a full-speed rush into digital state money |
| There is more friction in the rules. | Worries about compliance, cross-border oversight, and systemic risk | Helps investors and onlookers adjust their expectations about how long Gulf fintech will take |
| The focus is now on safer upgrades. | A digital riyal is less important than instant payments, data, and infrastructure. | Shows where the real opportunities and policy interest are going in the near future |
