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Riyadh, Dubai Mull Single Digital Currency in Cross-Border Transactions - Report

© Sputnik / Vladimir Vyatkin / Go to the photo bankDubai. File photo
Dubai. File photo - Sputnik International
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DUBAI (Sputnik) - Saudi Arabia and the United Arab Emirates announced plans on Saturday to launch a digital coin as a way to boost bilateral ties, Emirati state media reported.

The cryptocurrency was one of the initiatives rolled out at the regular Executive Committee of the Saudi-Emirati Coordination Council in Abu Dhabi, the WAM news agency said. Only central and commercial banks of the two Arab monarchies will be initially authorized to trade in cryptocurrency.

The countries hope that the digital coin will ease cross-border transactions, promote technological progress, and give them first-hand experience of how single currency shapes monetary policy.

Saudi Minister of Communication and Information Technology Abdullah Alswaha told Sputnik last year that Riaydh was considering to use blockchain technology in trading operations with Russia.

Riyadh Skyline showing the King Abdullah Financial District (KAFD) and the famous Kingdom Tower - Sputnik International
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"Absolutely, it will be our absolute pleasure and we welcome that investment," Alswaha said on the sidelines of the Future Investment Initiative conference in Riyadh in October, asked if Saudi Arabia was willing to trade with Russia through the blockchain technology.

According to the minister, Saudi Arabia is currently in "pilot phase" in two blockchain use cases.

"The first use case is smart contracts. There’s today a pilot between the Kingdom and the UAE to make sure we cut intermediary and the middle men. The second use is fintech. We can see this revolutionizing the way we look at insurance, at hedging risk, creating new industries in that space. We are doubling down on blockchain and welcome partnerships in that space as well," the minister said.

READ MORE: UAE Pardons UK National Who Allegedly Confessed to Being MI6 Agent

Blockchain technology is a system of organization of distributed databases. It allows for various transactions to be registered and labeled with a time stamp, and all information is kept in a distributed database available to all network users.

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