Saudi Arabia and the United Arab Emirates (UAE) have announced plans to issue a cryptocurrency for use in cross-border transactions. This, despite the fact that the Saudi Arabian Monetary Authority (SAMA) has effectively banned digital currencies in the Middle Eastern country.
The new digital currency, which will be based on blockchain technology, will reportedly only be used for inter-bank transactions between the two countries, which share a border in the eastern Arabian Peninsula, and not for customer use. No launch date has been announced.
While the UAE has made moves in recent months to adopt blockchain technology for its own uses, both countries have remained standoffish toward public use of cryptocurrencies.
The Dubai Blockchain Strategy is a massive plan to convert the Gulf emirate to a completely electronic transaction system governed by blockchain. The plan would convert all visa applications, bill payments and license renewals to the service by 2020. As those tasks together account for over 100 million documents each year, the country would save 25.1 million man-hours, or $1.5 billion, by going paperless.
Emcash is a state-backed subsidiary of the Dubai Department of Economic Development, which is run in conjunction with blockchain payment provider Pundi X, Coin Telegraph reported.
In Saudi Arabia, SAMA has warned citizens of the “negative consequences” of trading bitcoin, warning it “is not a currency approved within the Kingdom,” al-Arabiya reported in July 2017. An August 2018 warning noted that “virtual currency,” which it calls “get rich” schemes, “are not approved as official currencies in the kingdom and no parties or individuals are licensed for such practices by regulators in the kingdom.”
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