Cross-border Cryptocurrency from UAE and Saudi Central BanksDecember 12, 2018
The UAE and Saudi Arabia are finally set to come up with a cross-border digital currency. This currency is more focused on banks, and it is not meant for consumers.
SAMA, the Saudi Arabian Monetary Authority will be issuing the cross-border digital currency for the use of the two countries. The Central Bank of UAE and Saudi Arabia will be issuing the currency. The monetary authorities of both these countries will be collaborating.
Mubarak Rashid Al-Mansouri, the governor of UAE Central Bank in the year 2017 declared that the institutions were studying the technology required to understand and execute the digital currency.
There is lot of caution exercised when issuing this cryptocurrency, because, this will not be made available to the public and only the monetary authorities will be able to transact using this crypto.
In a high powered banking meeting where both of the monetary authorities were involved, they had to state that the study about the process is not yet complete on the sides of both the authorities.
Al-Mansouri stated that the framework has not been completed and that it is not clear about who will be involved from each side of the party.
He further added that “This is the first time that the cooperation of monetary authorities has taken place from different countries about this topic. We hope this achievement will foster a similar collaboration in our region.”
The cryptocurrency is not likely to be available for common use. It will strictly be used as a means of exchange between the Central Banks in both countries.
There has been consistent warming up concerning the blockchain technology from the UAE. In October 2018, there were reports about the plan of the Emirates to approve the Initial Coin Offerings (ICOs) as a source of funding for the private companies located in the Emirates. A regulatory framework is likely to be released before the first half of the year 2019.
Omar Saif al-Zaabi, the UAE securities market regulator chief had previously stated, “The board of the Emirates Securities & Commodities Authority [ESCA] approved ICOs as securities. Per plan, we need to have regulations on the ground during the first half of 2019.”
Regulation is a matter of concern when executing any cryptocurrency. Previously, Prince Alwaleed Bin Talal, a Saudi Arabia billionaire in the year 2017 stated, “It just does not make sense. This is not regulated, not under control, not under the supervision of any central bank.” Regulation, therefore, will make a world of difference with crypto.