The Strategist

UAE, Saudi Arabia to create joint cryptocurrency

01/23/2019 - 11:45

Representatives of the United Arab Emirates (UAE) and Saudi Arabia announced cooperation in order to create a new cryptocurrency. Representatives of both countries discussed a draft of a joint integrated strategy that includes initiatives in areas such as civil aviation, youth financial literacy and tcreation of a digital currency for cross-border payments.

hitesh choudhary  via pexels
hitesh choudhary via pexels
This initiative was announced at the next meeting of the executive committee of the Emirates, which was held in Abu Dhabi. The Council, which was created by the two countries last summer, is headed by Crown Prince of Abu Dhabi Mohammed bin Zayed Al Nahyan and Crown Prince of Saudi Arabia Mohammad bin Salman Al Saud.

The purpose of the new cryptocurrency is to facilitate cross-border payments, as well as develop technology, assess risks in the field of cyber security and study impact of the single currency on monetary policy. At the initial stage, only central banks and commercial banks of the two countries will be able to use the cryptocurrency.

Ultimately, as part of a joint program, the parties seek to protect interests of end-users, create standards application of technology, and take cybersecurity risks into account to determine effect of such currency on monetary policies, the Emirate News Agency reports.

In November, Mohsen Al Zahrani, Head of the innovation department of SAMA (the financial regulator of the kingdom), announced that Saudi Arabia will release its own cryptocurrency for interbank transactions in 2019, together with the United Arab Emirates.

Also, impact of the new cryptocurrency on the financial policies of both countries will be studied in the course of the joint project. Special attention will be paid to protection of consumer rights, establishment of technological standards and identification of cybersecurity risks.

In addition to developing the digital currency for cross-border trade, the countries intend to cooperate on another 6 programs, including programs in the field of civil aviation and the development of financial literacy among young people. For example, it was decided to simplify bilateral customs procedures between countries, as well as to hold joint exercises to assess sustainability of the supply of vital goods in the event of a crisis or natural disaster.