By The central banks found in both the United Arab Emirates (UAE) and Saudi Arabia have announced the launch of jointly owned digital currency trial.
The Central Bank of the UAE and the Saudi Arabian Monetary Authority (SAMA) announced together on Tuesday that their initiative’s goal is to facilitate and oversee blockchain-based financial settlements between the two middle-eastern nations.
Although both the middle-eastern nation’s central remittance systems have “evolved over time and proved their feasibility,” there is room for improvement with regards to international remittances, said both central banks.
The proof-of-concept trial which was announced on Tuesday will be a test to see whether both nations could indeed reduce the costs of remittances via a shared digital asset dubbed Aber. Furthermore, the study will also serve as a means to determine whether the blockchain platform could perform as an “additional reserve” for domestic transactions.
Initially, the first stages of the trial will focus on the testing of technical aspects and the digital asset will be restricted to “limited” banks in each country. Should no technical hitches be found, “economic and legal requirements for future uses will be considered,” claimed both institutions.
This news comes just over a year when it was announced back in December 2017 that both central banks were planning on launching a new cryptocurrency for the use in cross-border payments.
The UAE’s central bank governor, Mubarak Rashid al-Mansouri at the time, stated: “This is the first times the monetary authorities of two countries cooperation to use blockchain technology [sic].”
Could the trial truly succeed and reduce payment costs in both nations? Let us know what you think by leaving a comment below.
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