Saudi Central Bank and UAE Launch Digital Currency

Photo: Isotocphoto

Abu Dhabi, MINA – The Central Bank of the United Arab Emirates (CBUAE) and the Saudi Central Bank (SAMA) launched a plan to jointly develop a new digital currency ‘Aber’ project.

The project aims to evaluate the feasibility of issuing digital currency for use between the two central banks. ‘Aber’ is expected to develop a cross-border payment system that will reduce the time and costs of transfers between banks in the two Gulf countries. Thus quoted from Arabnews.

The two banks plan to develop technology, such as a distributed ledger, that can be used to manage digital currencies between the two central banks and banks participating in initiatives in Saudi Arabia and the UAE.

SAMA and CBUAE express their satisfaction with the results achieved, the vision shared and the valuable lessons learned so far, as part of the ‘Aber’ project.

Previously, the Council of Ministers approved a new law that includes changing the name of the Saudi Arabian Monetary Authority (SAMA) to the Saudi Central Bank on Tuesday. Under the law, the new Saudi Central Bank would be linked directly to the king and enjoy full financial and managerial independence.

The Saudi Central Bank Act established three core objectives for the new institution. The objective is to maintain cash stability, increase trust and confidence in the financial sector and support economic growth.

The new law also holds the central bank in charge of setting and managing monetary policy and outlines the relationships between banks, governments and other important international organizations and bodies. This includes establishing a framework for regulating bank operations and decisions.

Economist and Shoura Council member Fadhel Al-Buainain said one of the important aspects of the Saudi Central Bank Act was that the bank could be directly linked to the king.

“This enhances complete independence in relation to the establishment of monetary policy and the relationship between banks and governments and global organizations,” he said.

The law also states that the acronym SAMA, which was founded in 1952, will not change because of its historical importance domestically and internationally. This decision is considered important and reflects a wise decision because the acronym is widely known. (T/RE1)

Mi’raj News Agency (MINA)