ABER project: a recipe for digitalization from Saudi Arabia and the UAE

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An interesting joint project of the central banks of Saudi Arabia and the UAE – ABER – was announced back in January 2019. Its goal was to study the practical organization of domestic and international payments using the single digital currency of central banks (CBDC). IBM became the technical partner of the large-scale study. And in January 2021, a detailed report on the results of the project was provided.

And we have the opportunity to find out how the regulators of the two richest countries in the Middle East see the future of state digital currencies.

ABER: key features

The name of the project – ABER – very accurately corresponds to the stated goals. Indeed, in translation from Arabic, this word means “wanderer”: one who crosses borders. What is the uniqueness of ABER? Still, in recent years, many states are actively studying issues related to CBDC.

So, ABER is the first pilot project of a central bank digital currency with the possibility of dual emission. Both regulators, the Saudi Arabian Monetary Authority (SAMA) and the Central Bank of the United Arab Emirates (CBUAE), have been given the option to issue CBDCs with the technical ticker ABR.

This stablecoin is rigidly pegged to the rate of two currencies at the same time – the Saudi real (SAR) and the Emirati dirham (AED). The collateral was calculated using a fixed peg of both national currencies to the US dollar (USD). Thus, it is possible to exchange between different currencies – AED, SAR and ABR – almost instantly and in any direction.

Project participants

In addition to national regulators, 3 largest commercial banks of each country took part in the project. On the UAE side, these were ENBD, Dubai Islamic Bank and First Abu Dhabi Bank. Saudi Arabia was represented by Al Inma Bank, Al Rajhi Bank and Riyad Bank.


The ABER project pursued several important goals at once:

  • study the specifics of distributed ledger technology (DLT) and its suitability for creating a digital currency;
  • find out if a CBDC can improve the efficiency of cross-border payments;
  • compare the performance of DLT solutions with other existing calculation options, such as Real Time Gross Expenses (RTGS);
  • gain real experience in solving CBDC infrastructure deployment problems.

As a result of comparing various financial settlement technologies, the parties opted for blockchain. This solution is explained by its high fault tolerance, security from unauthorized access and decentralization.

After analyzing various DLT algorithms in detail, the initiators of the project settled on Hyperledger Fabric (HLF). It is a software solution for developing applications and specialized business solutions based on the open source blockchain.


ABER participants considered 3 options for using CBDC:

  • settlements between commercial banks in one country;
  • cross-border payments between central banks;
  • cross-border settlements between any banks.

In all cases, the use of DLT technologies was tested and such use cases were considered that existing solutions based on RTGS are not capable of providing. All tests have brought practical results. They pointed out that it is possible to create the most stable system based on the blockchain.

The issue and circulation of any currency, CBDC or token implies two main operations: the direct issue of a monetary unit and its transfer. All other operations can be modeled using these two concepts. Initial issuance of ABR and transfer to customers can only be carried out by national central banks. But the powers for the further movement of CBDC are already transferred to commercial banks.

Resolving privacy and security issues

The main problems of any currency system are privacy, security and scalability. Solving only one or two of them often leads to a worse situation with the third. The initiators of the ABER project planned to simultaneously remove all issues:

  • Confidentiality was provided by a multi-level access system. Thus, a commercial bank has access only to its own balance and details of transactions in which it participated. Central banks have access to information about all transactions with existing ABRs. For this purpose, 3 types of interaction channels have been created:
  1. personal – between a commercial bank and the central bank of his country;
  2. peer-to-peer – between several commercial banks and the central bank as a regulator;
  3. public – between all banks.

A personal channel is only needed for requests to buy or sell ABR. Public is used to access the history of transactions in order to prevent double spending. The peer-to-peer channel serves as an ABR transmission medium between system members.

  • Security, as well as scalability, was provided by the DLT technology itself, or rather its decentralization.

Test results

After analyzing the results obtained during the ABER project, detailed recommendations were developed for:

  • the software part of the CBDC infrastructure;
  • possible options for building monetary policy, taking into account the specifics of DLT technology;
  • ensuring IT security at all stages of the project;
  • management of user identification and their level of access;
  • training future participants in the system on the principles of working in it.

The final conclusion made by the national regulators of the UAE and Saudi Arabia is as follows: digital representations of values ​​in the form of CBDC are the most secure form of payments.

Of course, it has not been without a fly in the ointment in the form of problems with finding better algorithms for decentralized payments, delimiting the influence of central banks, associated implementation costs, etc.

In general, the participants of the project are satisfied with its results. And now they intend to make every effort to introduce these developments into national economies in order to increase the level of their digitalization and integration.


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