UAE and Saudi Arabia pioneer fintech for cross-border settlements

UAE and Saudi Arabia pioneer fintech for cross-border settlements

The United Arab Emirates and Saudi Arabia are pioneering financial technology for cross-border settlements, the UAE's central bank governor said this morning.

The transactions involve the use of a specially-developed digital currency which the two countries jointly commissioned.

Addressing a financial technology conference in Abu Dhabi today, the UAE's central bank governor, Mubarak Rashed al-Mansouri, said ""We hope that the potential success of this initiative will foster similar collaboration in the GCC region and globally." 

Mansouri said fintech has the potential to significatly improve financial inclusion and drew attention to the central bank's mandate for fostering financial inclusion and fintech innovation.

Mansouri explained that Abu Dhabi and Riyadh's central banks have launched a distributed ledger system to facilitate cross-border settlements. The system is underpinned by "proof of concept," and supported by fiat currencies from both countries.

The UAE central bank has also issued new regulations for stored value facilities (SVFs, a form of electronic pre-payment), with consumer-focused digital payment services more clearly defined, the governor confirmed.

Mansouri outlined the central bank's role in developing a strategic plan to foster integration of fintech, supported by a legislative and regulatory framework.

The conference in Abu Dhabi coincided with the pubication of a report that puts the UAE a clear first in the Arab world for integration of artificial intelligence (AI). 

Dubai Silicon Oasis Authority's Dubai Technology Entrepreneurship Campus (Dtec) created the report in partnership with ArabNet and startAD, which predicts that AI will account for 45% of the world's economic growth by 2030.

The report forecasts AI contributing 33.5% to the UAE economy by 2030, with 31.3% in Saudi Arabia and 25.5% in Egypt. The GCC is expected to see 28.8% of its overall economy linked to AI in the next 12 years.

Shahla Ahmed Abdul Razak, deputy CEO of Dubai Silicon Oasis Authority, said: "The results of the report reiterate our country's continued success in implementing the UAE Strategy for Artificial Intelligence."

Author spotlight

Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.

More on Fintech