The United Arab Emirates (UAE) is known to be the home of luxury and the latest technology, so it comes as no surprise that the UAE is looking into creating its own national cryptocurrency. Back in September, Dubai launched a blockchain payment system that allows citizens to pay bills using blockchain technology. In addition to a new cryptocurrency, the UAE is also considering using Ripple for cross-border payments to help speed up the process and lower the cost – presumably to become a major banking hub.
Middle Eastern Banking Hub
Ripple and its suite of platforms are well known throughout the banking industry and are currently being used by some of the biggest names in the field. Ripple’s technology allows banks to make cross-border payments happen in seconds and cost mere pennies. This gives banks using the technology the ability to provide a superior service to its clients, and the UAE is looking at rolling this out to all banks in the country. If this happens, it could make the UAE stand out as a leading banking destination.
Creating its Own Crypto
Staying true to its reputation, the UAE is looking into creating its own cryptocurrency. However, it won’t replace the Dirham. but will instead be used by banks to make cross-border payments with banks in Saudi Arabia – not good news for Ripple. This crypto will be more of a liquidity token rather than an all-out utility token, as its sole purpose is to provide liquidity.
The Marshall Islands proposed creating its own cryptocurrency earlier this year, but the International Monetary Fund (IMF) urged it to reconsider the decision. Despite the warning from the IMF, Hilda Heine – the president of the Marshall Islands – went ahead and continued preparing. She survived a vote of no confidence and is pushing on with her national cryptocurrency. Thankfully, the UAE isn’t subjected to the same scrutiny due to its robust economy.
If the UAE decides to create its own cryptocurrency for cross-border payments, it could render Ripple useless in the region. The UAE and its banks would roll out the blockchain platform with other key banks in the GCC and Ripple would lose its stronghold. This could be a huge disaster for Ripple, one that the wider crypto markets would relish.
