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UAE and Saudi Arabia launch common digital currency

The Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) have jointly launched a common digital currency project ?Aber? that will be used in financial settlements between Saudi Arabia and the UAE through blockchains and distributed ledgers technologies

The initiative comes under the framework of ?Proof-of-concept,? which studies the dimensions of modern technologies, their feasibility through practical application, impact on the improvement and reduction of remittances costs, the assessment of technical risks and how to deal with them.

In addition, the initiative will also deal with the technologies of the future and understanding the requirements of issuing a digital currency for use by the two countries. Furthermore, it is set to establish an additional means for the central financial transfer systems of the two countries and enable banks to directly deal with each other in conducting financial remittances.

The joint statement also pointed out that central banks in some countries have already begun pilot projects to explore the dimensions of blockchains and distributed ledgers technologies applied in the circulation of digital currencies. SAMA and the Central Bank of UAE share the same desire to launch pilot projects in the use of these technologies to identify them and learn how to benefit from them.

According to the statement, the pilot projects aim to benefit everyone locally and internationally. With this, the two countries aspire to be the forerunners in the application of modern technologies, as well as in their adaptation, development and delivery to the world.

As for the mechanism agreed upon by SAMA and UAECB for the implementation of ?Aber? project, the statement emphasised that concentration in the initial stages will be on technical aspects.

?The use of the currency will be restricted to a limited number of banks in each state. In case that no technical obstacles are encountered, economic and legal requirements for future uses will be considered,? noted the statement.