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UAE and Saudi talk cryptocurrency banking as Bitcoin eyes $20,000

December 14, 2017 1:35 pm


It is reported that the UAE and Saudi Central Banks are preparing to test a crypto initiative that will create a new digital currency for use in cross-border payments.

The Arab Monetary Fund (AMF) and Financial Stability Institute jointly organized on December 13-14, 2017 the 13th Annual High-level Meeting on Banking Supervision and Financial Stability in the Arab Region.

The meeting aimed among others to address financial technology and cyber-risk regulation.

Gulf News said that Mubarak Rashid al-Mansouri, the UAE central bank’s governor, unveiled the initiative at that meeting.

“This is the first time the monetary authorities of two countries cooperation to use blockchain technology,” the paper quoted al-Mansouri as saying.

It’s no wonder the two countries are talking on the eve of Bitcoin driving steadily towards $20,000.

Read: Bitcoin aftershocks: Don’t mortgage your house just yet!

UAE leads crypto efforts

The UAE is way ahead of its GCC counterpart Saudi Arabia when it comes to digital currency, having announced that 2018 will be the year of cryptocurrenty in the UAE.

It is home to a number of initiatives, including Dubai’s Global Blockchain Council, a public private initiative, ArabCoin, a private UAE crypto currency business, emcash, Dubai’s first official cryptocurrency and OneGram, a cryptocurrency business backed by gold.

The digital currency that will be created between the two countries would be based on blockchain, the shared ledger of transactions that is maintained by a network of computers on the internet rather than a central authority.

Watch: 11 really shocking business predictions for 2018

Al Mansouri said the UAE-Saudi digital currency would be used among banks, not by individual consumers.

“It is digitisation of what we do already between central banks and banks,” he said.

Following the interruption of last week’s GCC summit, both countries announced the establishment of a bilateral committee on economic, political and military issues.

Video: Not to miss: Top Saudi stories that made news in 2017

At $20,000’s door step

Bitcoin is worth $16,420.83 on December 14, following a pretty volatile 4 days of futures trading just ahead of CME’s futures contracts trading next week.

According to Reuters, investors grew optimistic that the $20,000-mark is within reach.

A Reuters technical analysis measuring the ups and downs in trading prices, known as waves, showed bullish momentum for Bitcoin.

“The technical analysis suggests an extension of a wave, which could mean that Bitcoin would easily surge above $20,000,” according to the Reuters analysis.

Reuters said that digital currency exchange operators Coinbase and Bitfinex reported problems with service through their websites on Tuesday.

Watch: 2017’s biggest headlines: From Trump’s refugee ban all the way to year’s end

After growing 6% since Sunday boosted by futures trading, Bitcoin briefly slumped below $16,000 per coin on Wednesday and triggered a two minute halt to futures trading on CBOE Global Markets’ exchange, according to Business insider.

Bitcoin has a total capitalization of $274.6bn while, Ethereum, a close competitor, has a market cap of $65.86bn, as per Business Insider.

Meanwhile, Federal Reserve Chair Janet Yellen joined the naysayers on Bitcoin sending a caution to investors over the digital currency.

Yellen called the cryptocurrency, which has surged about 17 times in value this year, a “highly speculative asset” and “not a stable store of value,” according to CNN Money.

 

 

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By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.



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