The central banks of Saudi Arabia and the United Arab Emirates are to trial a common digital currency aimed at lowering the costs of remittance transfers between the two countries.
Dubbed 'Aber', the new unit of account will be used for financial settlements between the Kingdom and UAE through the use of digital ledger technologies.
It is anticipated that the project, initiated as a proof-of-concept, will have spin -off benefits beyond cross-border remittances, for instance as "an additional reserve system for domestic central payments settlement system in case of their disruption for any reason"
The initial stages of the trial will concentrate on technical aspects, with the use of the currency restricted to a limited number of banks in each state. If there are no technical obstacles encountered, economic and legal requirements for future uses will be considered, the banks' state.
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