A portion of Dubai's Palm Jumeirah. Photo credit: Ben Mack
The UAE’s Central Bank and the Saudi Arabian Monetary Authority (Sama) will issue a digital currency for cross-border transactions between the two nations, CBUAE governor Mubarak Rashed Al Mansouri has announced.
“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 during the Arab Fintex Forum in Abu Dhabi.
While Al Mansouri said that the UAE and Saudi Arabia are currently studying the development of the blockchain-backed currency, there is no framework or timeline in place.
The new currency, he added, would only be used to improve the efficiency of cross-border transactions, rather than by consumers.
“CBUAE and Sama intend to execute a joint crypto-currency and distributed ledge proof-of-concept (PoC),” the Central Bank said in a statement.
“The PoC’s design mainly focuses on the transfer of ownership of a central bank asset among participants.”
In his remarks, Al Mansouri said that Fintech presents a number of opportunities and challenges for the sector.
“Crowd funding platforms and blockchain technologies are a case in point,” he said.
“Crowd-funding platforms, for example, have gained widespread attention and growth over the previous years. At the central bank of the UAE, we started developing regulations in this regard in 2016 in order to safeguard the financial system and protect consumers. This project is at a final stage.”