Financial systems in the GCC is entering a new operational phase as central banks begin to upgrade the infrastructure behind cross-border settlement.
‘Project Aber‘, a joint effort by the Saudi Central Bank and the Central Bank of the UAE, has delivered a clear confirmation that a dual-issued digital currency for interbank payments is technically and operationally viable.
This finding comes at a time when the GCC cross-border payments market is expected to reach 9 billion dollars by 2025, which increases the urgency to remove friction and operational risk from existing channels.
Why Current Systems Need Change
Traditional cross-border settlement across the GCC depends on correspondent banking. Commercial banks must hold large Nostro account balances in multiple jurisdictions.
This creates trapped liquidity that cannot be redeployed, increases compliance work, and slows payment processing. As trade and mobility across the region grow, this structure limits speed and capital efficiency.
Project Aber set out to test a model where central bank digital currency is used directly by commercial banks to settle cross-border obligations. This reduces the need for Nostro accounts and gives banks a more direct path to settlement.
Key Findings From the ‘Project Aber’
Project Aber reached several important outcomes that give central banks and financial institutions a practical direction for future infrastructure decisions.
1. Architectural Resilience
The tested DLT network operates through distributed consensus. Transactions are validated across multiple parties and sites instead of relying on a single central operator. This removes the single point of failure that affects many centralized payment systems. The system can continue operating even if one participant faces technical disruption.
2. Settlement Without Continuous Central Bank Presence
The settlement process can run even when neither central bank is online. This reduces operational dependency and lowers systemic risk. Commercial banks can transact based on pre-agreed rules that are enforced within the network.
3. Performance and Compliance
The project exceeded performance expectations for transaction throughput. It also met complex requirements around privacy, visibility of money supply, and traceability of issued currency. These conditions are essential for any future production-level network.
Impact on Liquidity and FinTech Development
1. Reduction of Trapped Liquidity
If commercial banks no longer need to maintain Nostro balances across multiple GCC states, they can release significant capital. This strengthens regional trade flows and supports SMEs that rely on faster settlement to manage cash cycles.
As cross-border e-commerce grows in Saudi Arabia, the UAE, and Bahrain, faster settlement supports more predictable operations for merchants and logistics partners.
2. Growth of FinTech Services
A settlement layer that is consistent, policy-backed, and technically reliable provides a foundation for new financial products.
FinTech companies can build services such as automated contract fulfillment and cross-border payment products that settle within minutes instead of days. It becomes easier to introduce smart contract tools for treasury operations, supply chain payments, and regulated digital assets.
Future Expansion of the Framework
1. Delivery versus Payment for Capital Markets
The same network design can support Delivery versus Payment processes for bonds or other dematerialized assets. This introduces a pathway for the GCC to modernize capital market settlement with more certainty, reduced counterparty risk, and clearer auditability.
2. Regional and International Participation
There is potential to expand the system to other central banks. This would support multilateral digital currency settlement across the GCC and beyond. It also positions the region to participate in global digital settlement networks that may form over the next decade.
Conclusion
‘Project Aber’ shows that a dual-issued digital currency backed by central banks can support secure and efficient cross-border payments.
It offers a direct response to liquidity constraints caused by correspondent banking and introduces a more resilient technical model for settlement.
As the GCC payment market grows toward nine billion dollars in value, the findings provide a clear direction for future policy, financial infrastructure, and FinTech expansion across the region.
