Saudi Central Bank Thinks Commercial Banks Should Use Ripple Tech, 2 Banks to Go Live in Q1
Saudi Arabia’s central bank might not be implementing the Ripple technology itself but it is working with Ripple to educate and encourage the commercial banks to use Ripple technology.
Saudi Arabian Monetary Authority (SAMA) is the central bank of the Saudi Arabia that was established in 1952, according to its website, SAMA deals with the banking affairs of the govt., handles the minting and printing of the national currency (the Saudi Riyal), manages the foreign exchange reserves and monetary policy of the country along with supervising the commercial banks, exchange dealers, finance companies, and credit info companies.
Now, in a recent interview, Mohsen Alzahrani, the head of the innovation at the Saudi Arabian Monetary Authority (SAMA) explained the role they are playing in the adoption of Ripple. Since last October, he has been working on bringing Ripple into the fold to eliminate the friction in the international transfers in Saudi Arabia and the United Arab Emirates.
He said that SAMA is looking into cross border payments but itself is not going to adopt the Ripple technology. He further explained that they have started the project with Ripple where they started the initiative to encourage commercial banks to use this technology.
The reason for choosing Ripple at that time, Alzahrani shared was the focused use case of the company. The focus being cross border payments and the fact that the “outgoing remittances” of the country are very high, SAMA decided to start this program which is lead and steered by the central bank itself.
The program involves “deep dive” training of the commercial banks in blockchain and Ripple technology. Banks have already started implementing Ripple technology as he said One bank is already using xCurrent while other is working on it. He further stated, “two more banks” will go live in quarter 1 of 2019.
According to the World bank report in December 2018, the remittances to low and middle-income countries are expected to grow. Also, remittances from the Gulf Cooperation Council regions especially Saudi Arabia are expected to see an upsurge with the rise in oil prices.
Just yesterday we reported that Western Union is piloting settlement tests with Ripple for cross border transfers between US Dollar and Mexico peso. Recently, two of the world's largest financial service companies Barclays and Mastercard initiated investment into a project that is backed by Ripple and its XRP-powered xRapid service.
The remittance company, SendFriend that is using xRapid for cross-border service payments received investment from both of these companies in the recent round of funding.