The Central Bank of the United Arab Emirates and the financial regulator of Saudi Arabia are working together to create a new cryptocurrency, according to Gulf News.
A currency for the people
The token is to be used for cross-border transactions between the two oligarchies. The bank said in a statement: “CBUAE and Sama [Saudi Arabian Monetary Authority] intend to execute a joint crypto-currency and Distributed Ledger Proof-of-Concept (PoC). The PoC’s design mainly focuses on the transfer of ownership of a central bank asset (crypto-currency) among participants.”
Mubarak Rashed Al Mansouri, governor of the bank, said on Wednesday at a meeting of the region’s bankers: “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.”
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He added that details of the project are still being worked out, but the token will be for banks to use rather than the general public.
Ripple in the sand
The two desert kingdoms have proved eager proponents of blockchain technology, especially since a key mufti officially decided that using it does not necessarily contravene Islamic law. Some examples: the CBUAE approved a plan to legalise initial coin offerings in September, and Al Hilal Bank, another Emirati government-linked bank, sent a kind of Islamic financial bond using a blockchain. Interestingly, the latter institution is famous for offering novelty credit cards, including one that can soak up perfume and another with a built-in compass that always points to Mecca.
Saudi Arabia meanwhile has been creating links with Ripple – in September its biggest bank signed a deal with the American blockchain firm, committing to using RippleNet to handle payments between itself and other financial institutions.