Saudi Arabia will be launching its own cryptocurrency next year. That’s according to Mohsen Al Zahrani, Head of Innovation at the Saudi Arabia Monetary Authority (SAMA) – the Middle Eastern country’s financial regulator.
Al Zahrani’s comments were first reported by the Saudi Press Agency on Tuesday and it seems the cryptocurrency is being developed in conjunction with another oil-rich nation – the United Arab Emirates (UAE).
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In fact, the Governor of the Central Bank of the UAE said on Monday that the cryptocurrency had entered design phase.
Speaking to local outlet Agraam, Mubarak Al-Mansouri said that the launch of the new cryptocurrency would be determined by how quickly Saudi Arabia is able to complete research necessary to its formation.
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Saudi Arabia – for the banks not the little man
Though cryptocurrency fanboys may be delighted at the thought of a central bank – and hence ‘mainstream’ – cryptocurrency, they are likely to be slightly disappointed by what the UAE and Saudi Arabia are developing.
The new cryptocurrency seems more akin to a payment system than an actual coin. It is being designed solely for use by banks and not average Joes trying to buy takeaway pizza and a carton of ice cream.
“The digital currency will not replace [physical cash],” said Al-Mansouri, “it will be a new payment tool used by banks and not individuals.”
That begs the question as to what the cryptocurrency will actually look like. Will it be pegged to the Saudi Dinar or will it be an entirely new coin? If it is the former, it’s difficult to see how it will really be a cryptocurrency and not simply a new system that enables Saudi Dinar payments over the blockchain.
At any rate, the news of a Saudi cryptocurrency comes less than a week after the head of the International Monetary Fund – Christine Lagarde – said that central banks need to start looking at digital assets and consider developing their own.