UAE, Saudi Arabia to Cut Remittance Fees with Common Digital Currency

February 27, 2019

The central banks of the United Arab Emirates (UAE) and Saudi Arabia have resolved to jointly initiate a digital currency trial.

The Saudi Arabian Monetary Authority (SAMA) and the Central Bank of the United Arab Emirates jointly announced on Tuesday that they are collaborating on a trial project that is aimed at enhancing blockchain-based money-related transactions between the two countries.

The central banks stated that although the central remittance systems of the individual nations have grown and substantiated their credibility, there is still a need for international remittance development.

Using a proof-of-concept trial, a common digital currency called Aber will be explored. This is to ensure both countries can effectively use it to reduce international remittance costs. The research is also aimed at determining the capabilities of the blockchain system as an additional reserve for domestic payments.

The early phases of the project centers on testing special use cases, while confining the digital currency to “specific” banks in the country. The two nations admitted that if the trial phase proceeds smoothly, meaning it encountered no technical obstacles, economic and regulatory requirements may be put in place for future applications.

The news comes more than a year after initial reports in December 2017 of a joint cryptocurrency project between the two Arab nations’ central banks for cross-border payments.

Mubarak Rashid al-Mansouri, Governor of the Central Bank of the UAE, said at the time of the report, “This marks the beginning of two countries using their monetary authorities to collaborate in utilizing blockchain technology.”

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