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.
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.
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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.