The Gulf Cooperation Council plans to establish a company to provide direct money transfers between its six member countries.
Bloomberg cited Kuwait central bank governor Mohammed Al-Hashel as confirming the plans to reporters on Monday following a meeting of regional central bankers in Kuwait City.
He said the company would allow members to transfer money “without reliance on international currencies” and Bahrain, Kuwait, Oman, Saudi Arabia, the UAE and even Qatar had agreed to contribute initial capital despite an on-going boycott of the latter by some of the group.
“After that the company has to go out and borrow from the Gulf market or use the capital it has generated,” the official was quoted as saying.
The six countries’ central bank governors will sit on the board of the company, which will be based in Riyadh with a secondary office in the UAE.
No operation was disclosed.
The plans follow a Reuters report in December citing UAE central bank governor Mubarak Rashed al-Mansouri as confirming plans to issue a digital currency for cross-border transactions with Saudi Arabia.
The currency would be used among banks, but not by individual consumers and is designed to make transactions more efficient, he said.
Bahrain, Egypt, Saudi Arabia and the UAE severed diplomatic, trade and transport links with Qatar last June over the country’s alleged support of terrorist groups.
Qatar denies the charges and has so far refused to give in to demands to close broadcaster Al Jazeera and loosen ties with Iran to end the boycott.
UK publication The Guardian reported last week that the four countries were studying plans to lift some restrictions on Qatar as the first step towards a wider deal.
This would see land, sea and air links opened to civilian traffic, according to the publication.