Saudi Arabia and UAE To Jointly Launch New Cryptocurrency

Recently, the launch of the Saudi-Emirati Pilot Cryptocurrency was announced by Mohammed bin Mazyad Altwaijri, the Ministed of Economy and Planning, of Saudi Arabia, along with Mohammad bin Abdullah Al Gergawi, the Emirati Minister of Cabinet Affairs and The Future. This launch was a part of the ministers kickstarting 7 new strategic initiatives, while they were attending a meeting of the Executive Committee of the Saudi-Emirati Coordination Council, held in UAE capital Abu Dhabi.

About the new Pilot Cryptocurrency launched by these two countries, WAM,

the official news agency of Saudi Arabia, wrote:

“The first of its kind joint pilot cryptocurrency was launched during the meeting. The cross-border digital currency 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. The virtual currency relies on the use of a distributed database between the central banks and the participating banks from both sides. It seeks to safeguard customer interests, set technology standards and assess cybersecurity risks. The project will also determine the impact of a central currency on monetary policies.”

The Ministers did not elaborate on the technical aspects of their crypto plan but it seems that the central banks of the two countries will be responsible for each of them running a node, in addition to the leading commercial banks of these countries.

It seems that this cryptocurrency won’t be made available for public access right away. The involvement of the apex banks of the two countries also adds a certain level of credibility. However, the whole structure does not seem to be as decentralized as cryptocurrencies are supposed to be, in theory. Whether it will work more like a fiat currency remains to be seen.

The economic tie up between the two countries seems to be a very promising collaboration. About it, WAM writes:

“The Saudi-Emirati alliance is one of the strongest economic alliances in the world. The combined sovereign wealth funds of the Kingdom and the UAE are ranked second in the world. The two countries rank eighth globally in terms of exports of goods and services according to the World Bank data. The market capitalisation of listed companies in the two countries is the 17th globally, and the two countries have an oil reserve accounting for about a quarter of the world’s total stock, which amounts to 24.3 percent.”

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