UAE, Saudi central banks to co-develop cryptocurrency for cross-border transactions

The Central Bank of the UAE, in collaboration with the Saudi Arabian Monetary Authority (SAMA) is embarking on a joint project to develop a blockchain-based digital currency which would be used in cross-border transactions between the two countries, Gulf News reported.

Mubarak Rashed Al Mansouri, Governor of Central Bank of the UAE, made the announcement at a high-level meeting for the Arab region on global banking standards and regulatory and supervisory priorities.

“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,” he said.

He further said that the monetary authorities are studying the concept of developing a digital currency between the two countries, and clarified that the digital currency will be intended to be used only between banks and not consumers. In an official statement, the Central Bank of UAE said:

“CBUAE and Sama intend to execute a joint crypto-currency and Distributed Ledger Proof-of-Concept (PoC). The PoC’s design mainly focuses on the transfer of ownership of a central bank asset (crypto-currency) among participants.”

In addition to the two monetary authorities, the project will also see participation from a number of commercial banks from both the countries that will perform transactions using the cryptocurrency.