Ripple has signed an agreement with the Saudi Arabian Monetary Authority (SAMA) to support Banks in the Kingdom of Saudi Arabia (KSA) to explore Ripple’s cross-border payments technology. Together, SAMA and Ripple have created a pilot program to provide support to KSA banks to use xCurrent, Ripple’s enterprise software solution that enables banks to instantly settle cross-border payments with end-to-end tracking.
The first of its kind to be launched by a central bank, the pilot program will allow participating KSA banks to use xCurrent for cross-border payment payments. SAMA will support KSA banks with program management and training. With xCurrent, KSA banks can process cross-border payments in seconds, with end-to-end visibility over the journey of the payment, at a low cost.
Most regulators in the Gulf initially expressed scepticism about fintech and last year the Saudi central bank warned citizens against trading bitcoin because it was outside the bank’s regulatory reach.
But Bahrain, keen to boost its role as a regional financial center, has been exploring the use of digital currencies and in the last few months, regulators in some larger Gulf economies have followed suit.
The Saudi central bank is working with the United Arab Emirates central bank to issue a digital currency that would be accepted in cross-border transactions between the two countries, UAE central bank governor Mubarak Rashed al-Mansouri told Reuters in December.
Dilip Rao, global head of infrastructure innovation, Ripple, said: “Central banks around the world are leaning into blockchain technology in recognition of how it can transform cross-border payments, resulting in lower barriers to trade and commerce for both corporates and consumers.” Rao added, “SAMA is leading the charge as the first central bank to provide resources to domestic banks that want to enable instant payments using Ripple’s innovative blockchain solution.”
Rao was appointed head of Ripple's new infrastructure innovation team in December with the aim of providing consultation and support to central banks and financial market infrastructures in the use of distributed ledger technology.
The announcement also comes a day after news emerged that UAE Exchange, a major remittance company in the United Arab Emirates, had signed on to use the startup's RippleNet product to manage cross-border payments.
Ripple has partnerships with over 100 financial institutions, most recently last week partnering with LianLian International, a China-based payment services provider.