In a recently held meeting of the Saudi-Emirati Coordination Council in Abu Dhabi, the Executive Committee set seven initiatives to increase the integration between Saudi Arabia and United Arab Emirates. The first initiative involves issuing a joint crypto-currency for use in cross-border transactions. Saudi-Emirati Pilot Cryptocurrency Saudi Arabia and the UAE are constantly settling cross-border payments between each other. There was a need for improved international remittance. As a result of this, the central bank of two nations jointly launched a digital currency trial. The trial of Aber, the digital currency to be used by the KSA and UAE will examine how the geographic neighbors can reduce remittance costs.
The cryptocurrency will be will be strictly targeted for banks at an experimental phase.
UAE and KSA share a border in the eastern Arabian Peninsula. The new digital currency, which will be based on blockchain technology, will be limited to be used only for inter-bank transactions between the two countries during its first stages until the governments develop a better understanding of how blockchain technology works cross-borders. Cryptocurrency is not for customer use. No launch date has been announced.
To evaluate the monetary policies of a centralized currency
The virtual currency operates on the use of a distributed database between the central banks and the participating banks from both sides. It aims to protect customer interests, set technology standards and assess cyber security risks. The new program will also determine the impacts of a central currency on monetary policies.
UAE Central Bank Governor Mubarak Rashid al-Mansouri said in a meeting on global banking standards and regulations for the Arab region during the Arab #FinTex Symposium on Blockchain & Financial Inclusion in Abu Dhabi,
“This is probably the first time ever that we witness the cooperation of monetary authorities from different countries on this topic. We hope this achievement will foster similar collaboration in our region”
Dubai Blockchain Strategy
The Dubai Blockchain Strategy is a gigantic plan to convert the Gulf emirate to a completely electronic transaction system backed by blockchain. The technology would convert all visa applications, bill payments and license renewals to the service by 2020. As those tasks combined account for more than 100 million documents every year, UAE would save 25.1 million man-hours, or $1.5 billion, by going paperless.
Dubai has adopted blockchain and cryptocurrencies for state uses but it has prohibited investors and consumers off of trading in bitcoin for now.
Dubai, the city of future is home to 85% expatriates who are here either for employment or to start their business in Dubai as it offers tremendous business opportunities. The government under its vision 2021 aims to be a leader in global technology. According to Rashid Yusuf, CEO Taklimakan says that by 2020, Dubai will be the world’s first economy to operate its own crypto currency and Dubai Land Department will be the world’s first government entity to use blockchain.
Em-cash – Dubai’s first official cryptocurrency
Government of Dubai launched its own blockchain-based cryptocurrency
“em-cash” which allowed consumers in Dubai to make retail payments in-store and pay for government utilities, telecommunications and school fees in government shop fronts.
EmCash has multiple advantages – faster processing, improved delivery time and less complexity and cost. The digital currency will change the way people live and do business in Dubai, and a great step ahead in the game-changing innovations to improve ease of business and quality of life.
According to Nassar Achkar, CEO of the Dubai-based Hyperchain blockchain technology service,
“Dubai is paving the way for checks and balances and they are regulating [this industry]. Banks are depending on the technology behind the cryptocurrency to use it because it’s faster, more efficient and more transparent.”
The technical aspects of Saudi-Emirati Pilot Cryptocurrency were not elaborated by the Ministers but the involvement of the apex banks of the two countries certainly adds a level of credibility. The impact of this currency whether it will be a success remains to be seen.