UAE and Saudi central banks put a joint digital currency into proof of concept

The Central Bank of the United Arab Emirates and the Saudi Arabian Monetary Authority had put a distributed-ledger proof of concept for a joint digital currency into motion by December 12, 2018, UAE central-bank governor Mubarak Rashid Al Mansouri said at the Arab Fintex symposium in Abu Dhabi.

Al Mansouri described an instrument supported by the two countries’ sovereign currencies and intended to facilitate cross-border settlements. The verified development was therefore an institutional experiment between monetary authorities—not the launch of a consumer cryptocurrency, public token sale or freely traded replacement for the UAE dirham or Saudi riyal.

That distinction mattered in December 2018. Bitcoin and privately issued tokens were enduring a deep market contraction, while central banks were investigating whether some of the underlying ledger technology could improve regulated payment infrastructure. The UAE-Saudi project placed that investigation directly inside a bilateral settlement relationship.

What had entered development

Contemporaneous Gulf News reporting recorded Al Mansouri saying that a distributed-ledger proof of concept was already under way. He presented the planned digital currency as backed by fiat currency from both countries and said a successful experiment could encourage similar cooperation elsewhere in the Gulf Cooperation Council and internationally.

The governor characterized the collaboration as potentially the first of its type between monetary authorities. That was his contemporaneous assessment, not an independently established global ranking. Other central banks had already conducted distributed-ledger and digital-currency research, making the narrower claim—two national monetary authorities jointly testing a cross-border instrument—the defensible one.

The December 12 remarks were also not the project’s first public trace. In an official December 5, 2018 speech, Saudi central-bank governor Ahmed Abdulkarim Alkholifey said SAMA had recently begun working with the UAE central bank on issuing a digital currency and using blockchain technology for interbank cross-border payments. He described the instrument as a digitized and coded representation of currency that would not replace official money, would be available only to participating banks and would support limited pilot operations.

Together, the December 5 primary record and December 12 disclosure established that work had progressed beyond a general expression of interest. They did not establish that production settlement had begun.

Why the institutional boundary mattered

A jointly issued bank-settlement instrument raised different questions from a permissionless cryptocurrency. Access could be restricted to approved institutions; issuance and redemption could remain under central-bank control; and the unit could be backed by sovereign money rather than depend on open-market price discovery.

The potential benefit was operational. A shared ledger might allow participating banks and central banks to test whether cross-border transfers could be reconciled more directly and efficiently. But those benefits were objectives, not verified results on December 12. The surviving event-day record disclosed no completed transfer, settlement time, cost reduction, transaction value or participating-bank list.

No cryptocurrency-market reaction can responsibly be attributed to the announcement. Digital assets traded continuously across multiple venues, and the reviewed sources provide no controlled event window connecting the symposium remarks to a particular instrument’s price or volume.

What remained unresolved

As of December 12, neither authority had publicly supplied a completion date, issuance amount, technical architecture, legal framework or production commitment. The records did not show whether one central bank or both would issue the instrument, how claims would be redeemed, or how liabilities would be divided across jurisdictions.

Those gaps prevent the proof of concept from being described as a deployed central-bank currency. The event-day conclusion is narrower: the UAE and Saudi monetary authorities were jointly testing whether a fiat-backed digital unit and distributed ledger could support interbank settlements across their border.

Later context

On January 29, 2019, the authorities publicly named the initiative Project Aber and said its initial technical phase would be restricted to a limited number of banks in each country. Their November 29, 2020 results statement later described Aber as a fully covered wholesale central-bank digital currency used only by the two central banks and participating banks during the experiment. Those later records clarify the project’s eventual design; they were not knowable outcomes on December 12, 2018.