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Saudi Arabia and UAE launch new crypto!

Saudi Arabia and UAE launch new crypto!

January 21, 2019 10:06 am,

The UAE and Saudi Arabia have launched a joint cryptocurrency during the 1st meeting of the Saudi Emirati Coordination council on Saturday in Abu Dhabi, UAE’s national press agency WAM said. They have unveiled a landmark agreement that will see the two countries co-operate in the development of a joint cryptocurrency, a form of customs union and a plan to ensure goods and supplies flowed in the event of a crisis. It also included a plan to allow Saudi and Emirati SME’s to bid for procurement contracts in both countries and set out measures to ensure those with disabilities can travel by air with the greater ease.

The cryptocurrency pilot will be seen as the most significant undertaking to date. Supporting financial technology and SME’s us seen as a crucial way to move on from reliance on petro-dollars and make the shift to a knowledge economy. Other measures focus on improving financial literacy among young people to improve spending habits and closer working practices in the aviation sector.

The currency operates on the use of “distributed database between the central banks and the participating banks from both sides”, aiming to protect customer interests, set technology standards and assess cyber security risks. The new program will also help evaluate the impacts of a central currency on monetary policies. 

“The cross border digital currency will be strictly targeted for banks at an experimental phase with the aim of better understanding the implications of Blockchain technology and facilitating cross border payments”, state news agency.

Until now the team did not provide further details on the characteristics of the project. Being only a first draft it is difficult to have a clear idea of how it will work but there could be some speculation taking into account the purpose of the announcement. Being a joint initiative it is very likely that both central banks will function as fully validating blockchain nodes and that the traditional banks of each country will, in turn have nodes of inferior hierarchy used for processing the transactions.

The blockchain will be private, so the general public will not have the possibility to access the information, still being a centralized blockchain it is likely to be designed to allow the reversal of transactions in case central banks need it.

All 16 members of the executive committee of the council followed up on the execution of the initiatives mentioned in the Strategy of Resolve. It is comprised of 7 initiatives including civil aviation, financial awareness youth training and development of a cross border digital currency. This will also help in research of effect of central currency on financial policies.

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