Media outlet GulfNews reported today on United Arab Emirates’ (UAE) recent blockchain undertaking involving central bank collaboration with Saudi Arabian Monetary Authority (Sama) to develop a cross-border cryptocurrency.

In a recent meeting on global banking standards and regulatory and supervisory priorities, Governor of the UAE’s Central Bank Mubarak Rashed Al Mansouri said: “This is probably the first time ever that witnesses the cooperation of monetary authorities from different countries on this topic.” And being the first of its kind in the region, he hopes that it will lead to similar regional collaborations.

Al Mansouri hinted on the current inclination, as being a “study between UAE and Saudi [Arabia]”, and the essential framework, though not yet structured, will be between banks and not consumers.

This comes off as a huge step from previous positions – the UAE Central Bank previously did not endorse digital currencies such as Bitcoin because of its speculative nature and risks involved. Further, in August, Saudi Arabia banned cryptocurrencies because of the high risk since the government doesn’t control Bitcoin.

However, recent developments such as ripple’s partnership with Saudi Arabia’s biggest bank National Commercial Bank of Saudi Arabia (NCB) gives hope to the development of the fintech venture in the region.

According to the GulfNews, Al Mansouri recognizes the recent development in fintech as both a challenge and an opportunity and that the best position would be to understand the risks and work on ways to mitigate them.

The Central Bank of UAE has already taken initiative into developing fintech regulations regarding cryptocurrencies. Al Mansouri said: “We started developing regulations in this regard in 2016 in order to safeguard the financial system and protect consumers. The project is at a final stage.”

It would seem there’s a future for blockchain and maybe cryptocurrencies as well in the Middle East as recent steps towards incorporating blockchain into the fintech and non-fintech spheres has proven to be promising. Last week, Bitcoin News reported on Abu Dhabi’s financial institutions’ success on phase 1 of their blockchain e-KYC solution.

 

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