According to reports from verifiable sources, the United Arab Emirates (UAE) and Saudi Arabia will work towards the development of a cross-border digital currency.
The apex banks of both nations, Central Bank of the UAE and the Saudi Arabian Monetary Authority (SAMA) will use blockchain technology to jointly issue a cross-border cryptocurrency to be used between both countries.Prior to this announcement, both institutions had last year been involved in discussions and studies on blockchain technology needed to develop the digital asset.
However, despite the enthusiasm around its creation, the authorities state that the cryptocurrency would be used strictly as a means of exchange between the central banks (for inter-bank transactions only) and would not be available to retail consumers at this time.
Speaking on the collaboration and technology, UAE Central Bank Governor, Mubarak Al-Mansouri remarks;
The Central Bank of UAE in cooperation with Saudi Arabian monetary Authority (SAMA) is working on a unique project based on blockchain technology, to issue digital currency to facilitate trans-border settlement…This is probably the first time that we witness the cooperation of monetary authorities from different countries on this topic and we hope that this initiative will foster similar collaboration in our region (Gulf Countries) and the world at large.
He further explains that the new digital currency is necessary as it would improve the efficiency and speed of cross border transactions between the two countries. Both nations are known to cooperate hugely in varying fields like energy and finance hence, the new initiative would serve to strengthen these ties further.
No time frame has been set for the completion of the project and listing of parties to be involved on both sides is yet to commence.
UAE and Crypto Efforts within the Region
The UAE Central bank had previously not endorsed cryptocurrency but with the growing potential of Fintech and adoption within the industry, the bank has looked to fill in on them.
In line with the above, the UAE has moved to adopt and study blockchain technology and cryptocurrency in the middle east especially among the Gulf countries. The Emirate unveiled plans in October for an ICO to fund private companies , just as they continue to work on a regulatory frame work to be delivered by the 1st quarter 0f 2019.
Additionally, the space seems to be growing exponentially as a new cryptocurrency exchange – Bitex was launched in the country last month, indicating a shift to the new asset class.