The UAE Central Bank (UAECB) and the Saudi Arabian Monetary Authority (SAMA) jointly announced yesterday that they will jointly launch the digital currency project “Aber” with the goal of using blockchain and distributed ledger technology for financial services settlement between the two countries. However, it is currently only for trial use and is only available to some banks in both countries.
According to the announcement, Aber is within the proof-of-concept framework to understand and study technology and feasibility through practical application and determination of its impact on remittance costs. The plan will allow the two countries to understand the requirements for issuing digital currencies, provide an additional option for the central fiscal transfer system of the two countries, and allow some banks to be more direct in handling financial remittances. Aber may also become an additional reserve system outside the domestic central payment and settlement system to prevent the former from being interrupted for any reason.
The announcement said that central banks in some countries have begun pilot programs to explore digital currency and blockchain applications. The Central Bank of the United Arab Emirates and the Saudi Arabian Monetary Authority also hope to start a pilot project to learn from and benefit from it. Although the two countries have established their own central systems for remittances and domestic transactions, and have proved their feasibility, the two countries chose to launch the project jointly rather than independently because they believe that there are still some areas for further development of international remittances.
According to the statement, the Central Bank of the United Arab Emirates and the Saudi Arabian Monetary Authority hope that both local and international will benefit from the plan. In addition, Aber will initially focus on technology. If there are no technical obstacles, economic and legal requirements will be considered for future use.