The Kingdom of Saudi Arabia and the United Arab Emirates (UAE) are reportedly working on a joint initiative that is focused on developing their own cryptocurrency.
According to the Emirates news agency, the Executive Committee of the Saudi-Emirati Coordination Council conducted a meeting (on January 19th) in Abu Dhabi (UAE’s capital city) during which leaders from both nations discussed various socioeconomic policies. Representatives from both Middle Eastern countries also reviewed strategies for cooperation involving blockchain technology.
The main topics of discussion during the meeting focused on Saudi Arabia and the UAE’s Strategy of Resolve which consists of seven different initiatives. These include offering training and educational courses on financial management, civil aviation and the creation of a cross-border cryptocurrency.
Establishing Appropriate Technology Standards, Before Issuing Digital Currency
As explained in the announcement, the cross-border digital currency will initially be developed and tested only for bank-to-bank transfers. This type of testing will be carried out in order to gain a better understanding of how blockchain-based payments are processed, according to the Executive Committee.
Both the UAE and Saudi Arabia are reportedly working on a cryptocurrency that would be issued by the central banks of both countries. Transactions involving the new digital currency will be conducted on a distributed database that may only be accessed by private financial institutions. In addition to providing a new type of digital payments platform, regulators from both nations plan to ensure consumer protection, establish the appropriate technology standards, and also take measure to prevent security-related risks.
Notably, the digital currency project will also assess the potential impact of centrally-managed digital assets on existing monetary policies.
Not Planning To Launch Decentralized Cryptocurrencies
Saudi Arabia’s authorities had reaffirmed their stance against cryptocurrencies. The kingdom’s Standing Committee, which monitors securities activities in the nation’s foreign exchange market, had clarified that decentralized digital currency trading was not regulated in Saudi Arabia.
Members of Saudi Arabia’s financial regulatory committee include the country’s Monetary Agency (SAMA), its Capital Market Authority, certain members of the Ministry of Interior, the Ministry of Trade and Investment, and the Ministry of Information. The official announcement was made after several websites and social media accounts had made false claims about being licensed to offer crypto-related services in Saudi Arabia.
Saudi Arabia had first revealed its plans of launching its own cryptocurrency in November 2018. According to news reports (at that time), Saudi Arabia was developing its national cryptocurrency through a collaborative effort with the United Arab Emirates (UAE).