Banks in Saudi Arabia, UAE join cross-border crypto project

Six commercial banks in Saudi Arabia and the United Arab Emirates (UAE) recently joined a crypto project. According to reports, the six will participate in the digital currency project (Aber) for cross border transactions between Saudi Arabia and UAE.

Argaam reported the news on February 5. According to the report, which cited the UAE central bank (UAECB), the cryptocurrency project will be implemented over a 12 month period. The two countries will use Aber in settling financial matters between the two countries.

Reportedly, the currency official insurance will depend on the outcome of the “proof-of-concept” stage. Authorities including the UAECB and the Saudi Arabian Monetary Authority (SAMA) are expected to decide on the possible use case for the currency.

The article states:

“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.”

The two countries announced they would work on a cryptocurrency last December through the SAMA and UAECB.

In January this year, Saudi Arabia and the UAE announced that they had agreed to cooperate on a joint cryptocurrency development target. They added that the joint project was to understand the development of blockchain technology.

The Dubai government has also announced its intention to issue a state-backed cryptocurrency, which will be pegged to the UAE’s fiat currency, the dirham. The cryptocurrency will be used for utility payments. The digital currency will be a leader in promoting the adoption of technology in the country. Authorities in the country are hoping these new changes will make Dubai a leading “smart city” in the region. The country also has a target to have half of the transactions done by the government recorded on the blockchain by 2021.

Initially, Saudi Arabia was against cryptocurrencies as they saw them to be risky investments. However last year in December, G20 adopted cryptocurrency regulations in line with Financial Action Task Force (FATF) standards.

In November last year, Crypto bulls became the first registered cryptocurrency exchange in the country.