Saudi Arabia may be ready to launch a cryptocurrency in 2019. The information was released by the Saudi Press Agency on Tuesday quoting Mohsen Al Zahrani, Head of Innovation at the Saudi Arabia Monetary Authority (SAMA). SAMA is the financial regulator of the country.
However, Saudi Arabia will not be the only country working on this virtual currency. The United Arab Emirates (UAE) are behind the development of this digital currency. According to the Governor of the Central Bank of the UAE the cryptocurrency was already being designed.
Saudi Arabia needs to continue with the investigation and research to provide all the necessary information about it. Once this stage is done, the digital currency will be ready to be launched, said Mubarak Al-Mansouri during a conversation to the news outlet Agraam.
It is important to mention that this virtual currency will work mostly for banks rather than for retail users. With a digital currency like this one, banking and financial transactions could be processed faster than with normal systems. This would help financial institutions to reduce their operational costs as well.
“The digital currency will not replace [physical cash],” commented on the matter Al-Mansouri, “it will be a new payment tool used by banks and not individuals.”
Nevertheless, there are some questions that remained unanswered regarding this digital currency. There is no information on whether it will be pegged to the Saudi Dinar or to another currency. It might become a digital Saudi Dinar rather than a unique cryptocurrency.
There are several countries that are planning to issue their own virtual currencies. For example, Norway, Sweden, Canada and Ukraine are evaluating different possibilities to issue their own digital currencies. At the same time, Christine Lagarde, head of the International Monetary Fund, said that banks should start looking at digital assets and experiment with them.