According to an article published by the Emirates News Agency on Jan 20, a committee composed of 16 members from the UAE and Saudi Arabia met to discuss how they would develop a Cryptocurrency for banks. They also discussed strategic issues for regional development in the fields of economic, military and social.
At the end of the meeting, they announced seven joint initiatives that they plan to implement within this year.
The Cryptocurrency for banks Will Be Based on A Private Blockchain
On economic matters, they decided to experiment with the blockchain technology to help ease financial transactions within the two countries. A pilot project was announced that would lead to the creation of a cross border virtual currency which would be used by banks at an experimental level.
“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. The virtual currency relies on the use of a distributed database between the central banks and the participating banks from both sides. It seeks to safeguard customer interests, set technology standards and assess cybersecurity risks. The project will also determine the impact of a central currency on monetary policies.”
The committee is headed by UAE’s Mohammad bin Abdullah Al Gergawi who is the minister of Cabinet Affairs and Saudi’s Mohammed bin Mazyad Altwaijiri the minister of Economy and Planning.
Details about the project are not entirely clear, however, being a joint initiative, it’s likely that both countries central banks will function as full validating nodes. Also, it’s expected that the other banks of each nation will have nodes of their own that will be used to process transactions.
It is believed that the blockchain will be private which means the general public will not be able to access the information. Also since it will be a centralized blockchain, it’s highly likely that its design will allow the reversal of transactions if any of the central banks wants to.
So far it’s not clear when testing of the project will begin.
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