Saudi Arabia’s central bank has signed a deal with Ripple to help banks in the kingdom settle payments using blockchain solutions.
The Saudi Arabian Monetary Authority (SAMA) — the central bank for the Kingdom of Saudi Arabia (KSA) — has signed an agreement with Ripple to help banks in the KSA improve their payments infrastructure using xCurrent, the company’s software solution that enables banks to instantly settle cross-border payments with end-to-end tracking.
The pilot program is the first of its kind to be launched by a central bank, allowing banks in Saudi Arabia to use Ripple’s software to instantly settle payments sent into and out of the country, the company said.
This will allow Saudi banks to make faster, cheaper and more transparent cross-border transactions, Ripple said, adding that the central bank would provide training to Saudi banks interested in the program.
SAMA’s recent adoption of xCurrent makes it the second central bank to use blockchain technology to revolutionize payments, following the Bank of England’s successful proof of concept with Ripple in 2017.
“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,” Dilip Rao, global head of infrastructure innovation at Ripple, said.
“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.”
Saudi Arabia’s central bank joins a growing list of financial institutions to adopt Ripple technology to improve their cross-border payments. Santander, UniCredit, UBS, ReiseBank, the National Bank of Abu Dhabi, CIBC, and ATB Financial are among the latest banks to do so.
In December 2017, the Japan Bank Consortium — a coalition of 61 banks in Japan – announced the launch of a new Ripple pilot with Woori Bank and Shinhan Bank, two of South Korea’s largest banks. The same month, Krungsri (Bank of Ayudhya PCL), one of the largest banks in Thailand, partnered with Ripple to “remove the friction” from cross-border payments.
Last month, Ripple’s adoption continued to stretch out, with MoneyGram announcing they would integrate XRP and Ripple’s xRapid solution.
Central bank Ripple pilot program – Image source: REUTERS/Chris Helgren