The central banks of the United Arab Emirates (UAE) and Saudi Arabia are jointly working on a cryptocurrency to enable cross-border transactions between the two countries.

Speaking on the sidelines of the Arab Monetary Fund (AMF) meeting, UAE Central Bank governor Mubarak Rashid Al-Mansouri revealed details of a joint project between the institution and the Saudi Arabian Monetary Authority (Sama) to develop a blockchain-based cryptocurrency to power cross-border transactions between the two countries.

“This is the first time the monetary authorities of two countries cooperation to use blockchain technology,” Al-Mansouri reportedly stated according to one regional publication. Elaborating further, the official confirmed research efforts undertaken by both monetary institutions to study ‘the concept of developing a digital currency between the UAE and Saudi Arabia,’ according to the Gulf News.

The report also cites the Central Bank of the UAE as stating:

CBUAE and Sama 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

Pertinently, the central banks’ cryptocurrency will not be available for retail consumers. Instead, the digital tokens will be issued and exchanged between the two central monetary authorities as well as a number of commercial banks in both countries – all of whom will be participants in the cryptocurrency’s blockchain.

Further, Al-Mansouri confirmed developments in drafting regulations for the FinTech sector, specifically crowd funding platforms. Without referring to them as ICO token sales, the central bank official cited challenges in drafting regulations without curbing innovation in new financial technologies.

“Crowdfunding platforms and blockchain technologies are a case in point,” Al-Mansouri stated. “Crowd-funding platforms, for example have gained widespread attention and growth over the previous few years. At the central bank of the UAE, we started developing regulations in this regard in 2016 in order to safeguard the financial system and protect consumers, this project is at a final stage.”

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