UAE and Saudi Arabia confirm plans for joint digital currency

The Middle Eastern nations have announced plans to launch a digital currency to serve both countries as part of a range of strategic initiatives

Mohammed bin Salman, Crown Prince of Saudi Arabia, has made his second official visit of 2019 to the United Arab Emirates to discuss the deployment of a joint digital currency between the two nations.

The digital currency, called ‘Aber’, was announced in January on an experimental basis amid plans to implement a number of new economic measures.

However, the currency was officially confirmed during bin Salman’s visit to the UAE this week.

The two nations, which have a combined economy of over $1.2 trillion, also announced plans to build a new joint oil refinery alongside the digital currency.

UAE news outlet The National reported yesterday that the digital currency was the result of the Saudi-Emirati Co-ordination Council, which was formed to strengthen relations between the two Arab states.

Arab unity

The currency would be one of the latest moves to promote increased unity between these two historically and geographically close nations.

A UAE spokesperson told Saudi news agency Spa on Wednesday that the two nations “agreed on many Arab issues”, further remarking that Saudi Arabia “carries the banner of defending its interests against all aspirations and projects aimed at splitting Arab unity”.

Sheikh Mohamed Bin Zayed of the UAE tweeted:

The digital currency would allow central banks in the two countries to easily trade with each other. At this point, it’s unclear whether the digital currency will ever be available for public use.

The news would suggest that Saudi Arabia’s stance on digital currencies has now softened after a committee which included the Central Bank of Saudi Arabia sought to ban cryptocurrency trading last August.

Discussing the nature of cryptocurrencies, the Saudi Arabian Monetary Authority announced:

“This thing is not regulated. It’s not under control. It’s not under the supervision of any federal reserve or any other central bank.”

Instead, it now seems that Saudi Arabia has elected to create its own digital currency that it can regulate internally.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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