On January 19, 2019, It was officially announced that the United Arab Emirates and Saudi Arabia would be joining forces to create and launch a new Cryptocurrency.
Before the announcement was made, 16 representative members of both countries met with the Executive Committee of the Saudi-Emirati Coordination Council in Abu Dhabi to discuss the project and agree on the Strategy of Resolves.
The Strategy focuses on 7 initiatives which include aviation, financial awareness youth training, and the development of a cross-border digital currency. The digital currency will, according to the announcement, be geared towards banks and “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.”
As mentioned, one of the focuses of the project is to explore the implications of blockchain technology. The Middle East has been enthusiastic about embracing blockchain in the last few years, with the National Bank of Kuwait even partnering with Ripple to help ease interbank transfers.
There have been rumors of the UAE, in particular, embracing mass blockchain adoption in the next few years. This collaboration could be seen as them dipping their toes into the water before making the plunge.
The use of blockchain for cross-border transactions was also mentioned and for good reason. Cross-border transactions are notorious for being slow and expensive to conduct. However, blockchain-based payment platforms have been progressively finding ways to transfer large funds in a shorter time and for lower transaction fees.
Should the nation be able to harness this advantage, it could become a new world banking standard.
Encouraging New Business
This is only the latest in a number of announcements regarding the progress of blockchain and cryptocurrency in the Middle East.
Back in December, it was reported that the UAE was actively trying to become a global hub for the blockchain and cryptocurrency industry, following the path of Malta, which is regularly referred to as ‘Blockchain Island’
Just some weeks before that, the collaboration between the UAE and Saudi Arabia for a Cryptocurrency Project was first spoken about officially.
“This is probably the first time ever that witnesses the cooperation of monetary authorities from different countries on this topic and we hope that this achievement will foster similar collaboration in our region,” said Mubarak Rashed Al Mansouri, the governor of the UAE’s central bank.
Should this collaboration be successful, more counties could potentially follow suit.