PKONWEB Report– Where other countries have had knee-jerk responses to bitcoin and blockchain technology, Saudi Arabia and UAE are mulling plans to issue a joint digital currency– as they diversify from non-oil economy.
A study has been launched into cryptocurrency, which will be used in transactions and payments, said UAE Central Bank Governor Mubarak Rashid Al-Mansouri.
In a statement on the sidelines of the Arab Monetary Fund (AMF) meeting, he unveiled a joint project to use the blockchain technology for cross-border transactions between the two countries.
“This is the first time the monetary authorities of the two countries are cooperating to use blockchain technology”, he said, hoping the initiative will encourage multi-party monetary cooperation in the region.
He said the study is still in its initial phase, adding that no date has been set to launch the joint digital currency.
The two largest economies of the Middle East are also poised to become one of the cheapest source of electricity using renewables, which means humongous mining of data for cryptocurrency transactions by exchanges could become comparatively affordable in the region.
Last October, Saudi Arabia got cheapest bids for solar power in auction– 1.79c/kWh as compared to Abu Dhabi’s for 2.42c per kilowatt-hour– a level oil, gas, coal, or nuclear can no longer come even close to, according to several experts.
Bitcoin– a digital currency, has a large and rapidly growing energy and environmental footprint. The bitcoin ecosystem now uses approximately the same power as the entire country of Bulgaria, about 0.2 percent of the global total for electricity.
The most popular digital currency has soared in value this year, rising over 1,000% against the dollar so far. This has prompted both increased interest and concern from investors, financial executives and monetary regulatory authorities worldwide.
Japan is now bitcoin’s heart; the country that is at the center of its support. The country’s Financial Services Agency (FSA) expertly analyzed the technology and developed clear and fair laws to regulate virtual currency exchanges.
Created in 2009, Bitcoin was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created.
These crytocurrencies and their derivatives use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control is related to the use of blockchain transaction database in the role of a distributed ledger.
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.