The United Arab Emirates (UAE) is set to launch its official crypto currency ‘Aber’. The country’s central bank recently announced that it is developing a digital currency that would facilitate interbank transfers with the Saudi Arabian Monetary Authority (SAMA).
The main use of this new UAE digital currency will be on making financial settlement using the distributed ledger technology that works so well with Bitcoin.
A limited number of banks in the UAE and Saudi Arabia will be using Aber. This potentially makes it easier to do cross-border transactions between the two countries.
Though the plans for a digital currency have been circulating for some time, this is the first solid indication that the UAE has gone beyond planning.
The central banks of the two countries have clarified that this is not an official roll-out but just a preliminary test and a look at the framework needed to properly implement such a process in the future.
The statement on the release of Aber was still vague about the official launch date. However, it did point out that the initial run will be focused on ironing out any technical issues with the token. If no tech difficulties are encountered then the UAE will start figuring out how to properly issue it and make it more accessible.
The fact that the UAE and Saudi Arabia have agreed to cooperate and try out a new digital currency is a positive sign for the Middle East. Most national systems for fiat cash transfers are pretty solid. It is only when cash needs to move between countries that obstacles come up and this is where this new tech experiment can be really beneficial. The UAE and Saudi Arabia are also considering using Aber as a means for domestic payments in case other means are disrupted.
Aber being issued is just part of the seven-point bilateral cooperation plan between UAE and the Kingdom of Saudi Arabia. This was negotiated on January 17, 2018 at a meeting of the Executive Committee of the Saudi-Emirati Co-ordination Council.
Blockchain firms on the lookout for a crypto friendly country in the Middle East may see Aber as a sign that the UAE could welcome their interests. Combined with a new pro-crypto legal framework, the UAE is expected to attract more crypto firms in 2019.