United Arab Emirates And Saudi Arabia To Launch Cross-Border Crypto Payments For Banks

United Arab Emirates And Saudi Arabia To Jointly Launch Cross-Border Crypto

The Central Banks of The United Arab Emirates (UAE) and Saudi Arabia are now working on a new digital currency to be used in cross-border payments. While the date for the launch still remains unconfirmed, like when this will finally be launched, it was already decided that the virtual currency will not be targeted at consumers and that only banks will be able to use it.

According to Gulf News, an Arabian news outlet, the two Central Banks and the monetary authorities of the countries will issue the cross-border token jointly and it will, at least in the beginning, be used only for transactions between the two countries. The two banks are collaborating ever since 2017, so this is a natural development of the situation.

Mubarak Rashid Al-Mansouri, the Central Bank governor of the United Arab Emirates, has affirmed in 2017 that both countries were studying the blockchain technology in order to provide cross-border payment for the banks of the countries. However, at the time they were very cautious about the timeframe of this and about how it would work.

Despite the technology being in a more developed state today, both banks are still studying the technology and the project can be considered far from complete at this point. They have also affirmed that they do not know when the project will be done and operational as there is still developing and then trials to be made.

A Way To Have More Control

The most interesting aspect of this new cryptocurrency is that it will not be available for people, only banks. This way, it will probably be the most centralized crypto ever. You would barely be able to compare it to Bitcoin or another token because of the way it will work. These new tokens will be more like an internal technology used to send and receive money than anything else.

Spokesmen from the banks have affirmed that this is possibly the first collaboration between two banks without a third party intermediary to make cross-border transactions by themselves, which is an important first for the industry.

The UAE also has plans for regulated Initial Coin Offerings (ICOs), which will work in a very similar way to securities. According to the spokesman, ICOs should probably be regulated during the first half of 2019.