Saudi Arabia and the UAE have launched a new cryptocurrency targeted for banks. The information was released by Saudi Arabia’s Minister of Economy and Planning with UAE’s Minister of Cabinet Affairs and The Future. These MInisters are Mohammed bin Mazyad Altwaijri and Mohammad bin Abdullah Al Gergawi, respectively. The information was recently released by UAE’s official news agency.
UAE and Saudi Arabia Launch a Cryptocurrency
These two countries have decided to launch a new cryptocurrency that will be used by banking institutions in the region. This is part of the seven strategic initiatives that were launched during the first meeting of the Executive Committee of the Saudi-Emirati Coordination Council.
Apparently, the intention is to test blockchain technology and a new way to process cross-border payments. This would make transactions much faster and more efficient.
The official report reads as follows:
“The first of its kind joint pilot cryptocurrency was launched during the meeting. The cross-border digital currency will be strictly targeted for banks at an experimental phase with the aim of better understanding the implications of Blockchain technology and facilitating cross-border payments.”
The virtual currency is based on blockchain technology and it is controlled by the central banks that participate in the pilot. With this digital asset, customers can be safeguarded from the risks associated with handling digital currencies. Until now, there is no information regarding how the project is going to be designed.
Apparently, the public will not be able to have access to the system. Only banks will have access to it. Nevertheless, the report does not explain how they will be issuing these tokens. It might be possible for central banks to control the nodes and commercial banks might be able to see through their nodes what central banks are doing.
In the future, if the project turns out to be positive, it could be deployed to the wider public. Customers could be connected to the network using a light wallet. There is also no information regarding the technology that they are using for this project.
Ripple, one of the largest companies in the cryptocurrency space is working in order to improve cross-border payments around the world. Ripple has already targeted clients in the Middle East and had the possibility to enhance their services.