Saudi Arabia, UAE to Cut Payment Costs With Common Crypto

The United Arab Emirates’ (UAE) central bank and the Saudi Arabian Monetary Authority (SAMA) have decided to join forces in order to launch a digital currency trial. The platform the two central banks are developing is named “Aber,” which is basically an interbank digital currency. The project, for now, will be restricted to a limited number of banks since it is still in the initial stage.

Outlining Aber

According to the joint statement released from the banks, it outlined the specific use of Aber and its reason for existence. As mentioned, it will only be made available to a handful of financial settlements. This will be made possible via the use of distributed ledger technologies or DLT. The banks confirmed that this will be done “on a probation basis,” thus only a limited number of banks – all of which are in the countries – will be given authority.

It holds true that the two countries have been vocal about their plan to develop a digital currency specifically for cross-border interbank settlement. In fact, this has already been reported in the past, though the two financial institutions barely give details about the platform. But right now, this appears to be the first official confirmation of the currency’s name, as well as its so-called initial circulation scope.

The banks, however, explained that that the issuance of the currency is contrary to popular belief. This is due to the fact that it falls directly within a proof-of-concept framework. The latter, in particular, is aimed at studying the many dimensions found in modern technologies, as well as their respective feasibility. These will be achieved through practical application and determination.

Making Crypto Supportive

Both of the central banks are confident that they will be able to pinpoint the impact on the currency’s improvement. At the same time, they will be able to handle the reduction of remittance costs, as well as the superb assessment of technical risks and dealing them.

Unfortunately, the statement did not include an official launch date for the Aber’s pilot issuance. Interestingly, it is outlined to be specifically focused on technical aspects. Also, both economic and legal requirement is expected to be for future uses if and only no technical challenges surface.

For the two countries, they consider bilateral issuance an important matter, especially since national central systems (meant specifically for remittances and domestic transactions) have proven to be stable and solid. However, they acknowledge the fact that some aspects concerning international remittances require further improvements. The Aber project’s goal is to ascertain whether a cryptocurrency could become supportive of this development.