The Gulf Cooperation Council (GCC) is in the process of setting up a company to allow the bloc’s member states to transfer funds without relying on foreign denominations such as the US dollar.
In what is an unusual instance of regional cooperation, the company’s board will include Qatar, the Gulf state currently boycotted by three fellow GCC members Saudi Arabia, Bahrain and the UAE plus Egypt.
The new company, whose CEO and trading name have yet to be confirmed, is to be headquartered in Riyadh, and will serve all six countries in the GCC: Saudi Arabia, Oman, Qatar, Kuwait, Bahrain and the UAE.
Kuwait’s central bank governor Mohammed al-Hashel told reporters this week that the Riyadh-based company will allow citizens in member states “to transfer money without reliance on international currencies.”
The governor confirmed that a secondary regional office would be opened in the UAE. Jason Tuvey, of Capital Economics in London, told Bloomberg, “It’s a way of showing there are still areas for cooperation on the economic side even if they can’t agree on the political issues.”
The development comes following a Reuters report in December that the UAE’s central bank governor Mubarak Rashed al-Mansouri had confirmed plans to issue a digital currency for cross-border transactions between the UAE and Saudi Arabia. The cybercurrency would be for use by the two countries’ banks and not by individual clients.
The new company is expected to start trading in the second half of this year.