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The joint cryptocurrency project between the UAE and Saudi Arabian authorities has been officially announced.
At its first meeting in Abu Dhabi, the Executive Committee of the Saudi-Emirati Coordination Council announced seven joint initiatives in important sectors. The committee is tasked with ensuring the implementation of the joint initiatives.
Among these seven initiatives, the Saudi-Emirati cryptocurrency pilot has also been included. According to the announcement:
“The cross-border digital currency will be strictly targeted for banks at an experimental phase with the aim of better understanding the implications of Blockchain technology and facilitating cross-border payments.”
The digital currency will rely on the use of a distributed database between the central banks and the participating banks from both sides.
The project aims to safeguard customer interests, set technology standards and assess cybersecurity risks. It will also determine the impact of a central currency on monetary policies.
Previous reports have suggested that the project has already been in the works for quite some time. In November 2018, UAE central bank governor Mubarak Al-Mansouri had said that the cryptocurrency had entered design phase.
“The digital currency will not replace [physical cash],” Al-Mansouri said at the time, adding “it will be a new payment tool used by banks and not individuals.”
Last month, Al-Mansouri made the project announcement at a high-level meeting for the Arab region on global banking standards and regulatory and supervisory priorities, saying:
“This is probably the first time ever that witnesses the cooperation of monetary authorities from different countries on this topic and we hope that this achievement will foster similar collaboration in our region.”
