Better Reduced Remittances in Saudi Arabia with Ripple Blockchain – Moody’s investors services

Saudi Arabia has announced its deal with Ripple which allows remittances with better speed and lesser cost - moody’s investors services
By Casper Brown
Updated April 1, 2022
Ripple

Agreement has been signed in between (Saudi Arabian Monetary Authority) SAMA and Ripple. As per which xCurrent payment method will be deployed for cross-payments, which might assist in generating a savings of close to $400 million every year.

Advertisement
Advertisement

Ripple Blockchain distributed ledger technology:  Unraveling the insites

As the news goes, UAE Exchange has announced its deal with Ripple money transfer program which allows ‘real-time’ cross-border payments with better speed, transparency and measurably lesser cost.

Basically, soon a  pilot program will be launched, which with the use of distributed ledger technology (DLT) will assist Saudi banks in exploring new cross-borders transactions solutions while saving up to $400 million in coming time frame.

Proper preparation like program management / supervision and a list of other support amenities has been assured to be instigated by Ripple and SAMA. As a matter of fact, to make sure technology is applicably adopted before initiating its wider use, a pilot program has been designed with a small number of banks and minor transactions.

As per Moody’s, with a broader community of migrant workers like most other GCC countries, a huge difference can add up to a large number of low-value remittance transactions to home countries. Also, Moody’s investors services added that “Saudi banks will potentially improve their profitability on cross-border transactions by reducing the cost of each transaction while gaining revenue with higher volume as the customer experience improves with the saving of money and time”.

If we have to put it in numbers, as per Moody’s estimations, even a reduction of 10% in the cost of cross-border transactions, can assist in saving up to $200 -$400 million per year.

Factors highlighted while introducing Ripple remittance program,

  • An estimated drop of 50% on remittance fees.
  • An initiative just to serve as an intermediary between Saudi Arabia’s banks and global banks.
  • No guarantee of hasty or impulsive widespread use of distributed ledger technology (DLT) for cross-border payments, even in Saudi Arabia.

Ripple partnerships led its blockchain technology to rule the market

  • Definitely Commencing a global move towards blockchain
  • A step ahead by the team of Ripple, after successfully completing a proof of concept with the bank of England (using DLT to enable two separate real-time gross settlement system).
  • Even though blockchain technology can be still stated as an untested stage for money transactions, this pilot program will definitely assist in addressing the problems linked with interbank transfers and transfers which run through multiple banks.
  • With two main products, named as xCurrent and xRapid, the deal in between Saudi Arabia and ripple is based on xCurrent for greater transparency and lower cost. (xCurrent – a ripple enterprise software solution which supports banks in settling cross-border payments instantly’ with complete transparency and end to end tracking).
  • More than 100 financial institutions are already working with the ripple to make their end-to-end transactions more transparent and instant settlement of payment.

What are your thoughts on Ripple remittance program with saudi arabia? Let us know below!

Advertisement
Casper Brown
I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.