Six commercial banks in Saudi Arabia and the UAE are now part of a digital currency project looking to boost cross-border transactions. This is according to a report by major Saudi Arabian financial news portal Argaam.
Digital currency to be used for cross-border transactions
Argaam in its report cited comments from the UAE central bank (UAECB). The primary objective of the project dubbed Aber is to use digital currency for financing transactions between the two countries. In December last year, the UAECB revealed that it would be developing a cryptocurrency in partnership with the Saudi Arabian Monetary Authority (SAMA). There is also an earlier report that mentioned that the two countries intend to use the cryptocurrency to facilitate cross-border transactions.
Six commercial banks in the UAE and Saudi Arabia have joined the interbank digital currency project. Furthermore, the project is slated to be implemented over the next 12 months. Argaam in its report stated that “The currency’s official issuance is conditional on the outcomes of the “proof-of-concept” stage. The Saudi Arabian Monetary Authority (SAMA) and the UAECB will decide on the feasibility of the currency’s practical applications.”
In January, Saudi Arabia and the UAE announced that they have partnered on cryptocurrency development. Through the partnership, the two countries hope to better understand the development of blockchain technology and digital currencies.
In October last year, reports surfaced that the Dubai government might issue a state-backed cryptocurrency pegged to the dirham, the nation’s fiat currency. The state-backed crypto could be used for utility payments.
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