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The UAE Central Bank's alliance with its Saudi counterpart will give regulatory impetus to the use of digital currency in official channels. Image Credit: Gulf News Archive

Abu Dhabi: The central banks of Saudi Arabia and the UAE will jointly develop a blockchain-based digital currency.

In a joint statement, the Central Bank of the UAE (CBUAE) and the Saudi Central Bank (SAMA) launched the ‘Aber’ project, which seeks to evaluate the feasibility of issuing a digital currency for use between the two central banks. The aim is to develop a cross-border payment system that will reduce transfer times and costs between banks in the two Gulf states.

The banks plan to develop a technology, such as distributed ledgers, which can be used to manage digital currencies between the two central banks and banks participating in the initiative in Saudi Arabia and the UAE. SAMA and the CBUAE “expressed their satisfaction with the achieved results, the visions shared, and the valuable lessons learned” as part of the ‘Aber’ project.