Banks all over the world are trying to come up with innovative ideas. A strong focus on faster payments and lower transaction fees seems to be the smart choice. Achieving that goal is not as easy as some people may think, though. It usually requires an entire infrastructure overhaul before any savings are passed down to customers. In the case of the Saudi central bank, they’re focusing on Ripple technology to make this happen.
The news regarding Saudi Arabia’s central bank tapping Ripple is quite surprising. Even though the blockchain startup has a solid technology stack, there is still no “real life” banking app using it. The company’s xCurrent system is of great interest to financial service providers, though. It can effectively allow for instant settlement of cross-border transactions. Additionally, there will be more transparency and lower costs to boot. This is also good news for customers who have an account with any bank using the xCurrent stack.
Another Feather in the cap of Ripple
As of this week, Saudi Arabia has its own sandbox environment to experiment with this technology. The Saudi Monetary Authority entered an agreement with Ripple to see how this technology holds up in the banking sector. All of the necessary training and project management will be provided by the SAMA. Any bank in the country is invited to develop new use cases for Ripple technology in the coming months. It is evident big things are bound to happen for this company and its native XRP asset.
Ripple Global Head of Infrastructure innovation Dilip Rao comments:
“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. 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.”
It is not the first time the blockchain startup gets major recognition. Last year, the Bank of England conducted a proof of concept using Ripple technology as well. It is possible this technology will power the Global RTGS project later in 2018. With central banks paying more attention to the blockchain, an interesting future awaits. For now, it remains unclear what Saudi banks will create on top of Ripple exactly. Other than using xCurrent, they may want to develop their own proofs of concept using XRP or a cryptocurrency of their own.
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