Two middle-east neighbors; Saudi Arabia and The United Arab Emirates (UAE) have a launched a government backed crypto-currency which will facilitate cross-border payments. This state-backed crypto was one of the agenda’s in the 7 point co-operation plan unveiled on the 20th of January by the two countries.
Other than crypto, other agenda’s on the co-operation plan include financial literacy for children, relaxed procurement restrictions that will see both Saudi and Emirati small and medium-sized enterprises bid for procurement contracts in both countries, just to mention but a few.
According to state news agency, Wam; the two countries will conduct a crypto pilot by strictly targeting banks inorder to gain a better understanding of the implications of Blockchain technology while facilitating cross-border payments at the same time.
The state backed crypto will depend on the use of a distributed database between central and commercial banks from both countries. The crypto pilot will seek to set technology standards, protect customer interests, while also assessing cyber security risks within the Arab co-operative.
According to state news agency Wam; the state backed crypto is one of a kind especially since its being launched jointly by two national governments. Countries such as Venezuela have tried to launch their own state backed cryptos but have faced great difficulties. Iran has also been flirting with the idea inorder to circumvent biting sanctions imposed on it by the United States.
The joint move by Saudi Arabia and The United Arab Emirates, speaks to the growing interest in the digital currency space in the Middle East. Should the pilot be successful it would mark an interesting precedent for other state unions seeking to explore crypto-currency for better financial co-operation. States like Iran, and Venezuela, could borrow a leaf from the UAE and Saudi, crypto union but only if they can overcome some of the baggage that holds both countries back.