The central bank of the UAE, and its Saudi counterpart the Saudi Arabian Monetary Authority (Sama) have jointly issued a cross-border currency that will be used between both countries, according to CCN.
The innovative Saudi-Emirati Pilot cryptocurrency was launched this week. The two countries that together have the world’s second largest combined sovereign wealth funds, have implemented this new initiative after spending much of last year researching cryptocurrency technology.
At the meeting in Abu Dhabi, the UAE committee was headed by Mohammad bin Abdullah Al Gergawi, Minister of Cabinet Affairs and The Future while the Saudi side was led by Mohammed bin Mazyad Altwaijri, Minister of Economy and Planning.
This joint pilot cryptocurrency, the first of its kind, is strictly for the use of banks. The aim is for a better understanding of blockchain technology and for facilitating cross-border payments. According to the announcement, this new cryptocurrency relies on the use of a distributed database between the central banks and all participating banks on both sides of the border. The aims are to safeguard customer interests, set high technology standards and to assess cybersecurity risks. The project will also determine the impact of a central currency on monetary policies.
In December 2018, the UAE’s Securities and Commodities Authority recognised ICO tokens as securities. In an effort to boost financing in capital markets, they have introduced ICOs as a way to fundraise for companies and startups.
Speaking at a seminar, UAE securities market watchdog chief, Omar Saif al-Zaabi said: “The board of the Emirates Securities and Commodities Authority has approved considering ICOs as securities. As per our plan, we should have regulations on the ground in the first half of 2019”.
Although the authorities on both sides of the border are being cautious, they continue to encourage blockchain development in the countries. Some leading blockchain and crypto companies have already started looking towards UAE to expand their services.
These initiatives thrust the UAE and Saudi Arabia firmly into the future of technology which will revolutionise the financial sector.