UAE Central bank Dismisses Incorrect Reports to Say: We Are “Not Using Digital Currency Yet”

There had been a lot of excitement in the crypto verse, when the central banks of a few Gulf nations were reportedly starting the active use of digital currencies for the settlement of their payments, not only in the country but also overseas. As it turns out this was not true.

The UAE’s Central Bank(CBUAE) has had to issue a statement to deny reports that alleged that the banks of UAE and Saudi Arabia had started using online currency. In their statement, the CBUAE went on to clarify with media outlets that although work was being done to see the viability of incorporating the blockchain, this was still at a very nascent stage.

The CBUAE acknowledged that it was working in conjunction with the Saudi Arabian Monetary Authority (SAMA) on the project. At this stage, the statement clarified, the work “ constitutes a proof-of-concept (PoC) for experimenting with blockchain technology to facilitate cross-border payments between the two countries.”

The joint venture itself is still in its early stages, the PoC, as noted by the statement, is still being worked on. Both central authorities are working with the same tech company to proceed with the implementation of the PoC which is expected to be ready by the last quarter of next years. The announcement went on to say, how this

“will help CBUAE gain a deeper understanding of the feasibility of distributed ledger technology in this field and explore the potential opportunities and benefits of a digital currency.”

Depending on the results of this collaboration, both countries banks will conduct feasibility studies about the use of digital currency for cross-border transactions. Talking about the prospects of this, the CBUAE Governer, H.E. Mubarak Al Mansouri noted:

“This is probably the first time ever we witness such cooperation in this policy front. We hope that the potential success of this initiative will foster similar collaboration in the GCC [Gulf Cooperation Council] region and globally,”

The idea is to make it easier to organize inter bank transactions between the two neighbors, with the use of digital currency. This is encouraging, the use of blockchain technology incorporated into the banking sector will be a positive step for the industry.Whether it translates into something more substantial or gets waylaid needs to be seen.