Saudi Arabia-UAE To Jointly Issue Digital Currency For Interbank Financial Settlements

The United Arab Emirates (UAE) is discussing the possibility of a common digital currency and other policy measures with Saudi Crown Prince Mohammed bin Salman who arrived in the West Asian country of Emirates yesterday.

While reporting the news of visit, English media outlet The National revealed that Prince Mohammed was warmly welcomed by the UAE Highness Sheikh Mohamed bin Zayed al Nahyan, the Crown Prince of Abu Dhabi.

Both leaders have formally accepted collaboration on four initiatives. Furthermore, seven strategic initiatives were discussed as well.

The Prince Mohammed and the Deputy Supreme Commander of the UAE Armed Forces Sheikh Mohamed bin Zayed al Nahyan also agreed to roll out a digitial currency to enable trading between the financial institutions in both countries.

Earlier in January 2019, the United Arab Emirates Central Bank (UAECB) and the Saudi Arabian Monetary Authority (SAMA) had elaborated on the planned joint digital currency.

Discussions were also carried out about the construction of a new oil refinery with a daily refining capacity of 1.20 million barrels. Both leaders also discussed about cybersecurity.

The National, citing Saudi media outlet Spa, has stated that the UAE regards Saudi as its “safety valve,” carrying “the banner of defending its interests against all aspirations and projects aimed at splitting Arab unity.”

Later this week, bank officials representing both countries will discuss major issues and opportunities in financial sector. The meeting is scheduled to happen in Riyadh.

The UACEB-SAMA digital currency has been Christened “Aber” and will be used only for financial settlements based on distributed ledger technology. In this regard, at that time, partakers in the project issued the following statement:

The digital currency will be “on a probational basis and exclusive use by a limited number of banks in the two countries.” The banks, however, did not reveal any specific date for the piloting of the currency. Even the news report about yesterday’s meeting did not specify any particular date about the issuance or trial of the digital currency.

The discussion about Aber and other matters is part of a seven-point bilateral partnership strategy between the Kingdom of Saudi Arabia and UAE. The plan was finalized in a meeting of the Executive Committee of the Saudi-Emirati Co-ordination Council in January 2019.