A major payments provider in the United Arab Emirates (UAE) is implementing blockchain-based systems to operate remittance facilities, while the country’s government is discussing the creation of a state-backed cryptocurrency in partnership with Saudi Arabia, as per two reports in the week of December 11, 2018.

RippleNet Technology to Be Deployed

Continuing its strong onboarding performance in the Middle East and Asia, U.S. startup Ripple has signed an understanding with Abu Dhabi-based UAE Exchange to launch cross-border remittances via the former’s enterprise-grade RippleNet blockchain, as reported by Reuters.

Asia receives over $613 billion each year in remittances, with a large chunk coming from expat workers in the Middle East. The latter region is dominated by foreign exchange and payments company Finablr, a local subsidiary to UAE Exchange. While most funds are currently sent through foreign exchange branches, websites, and mobile apps, the company intends to deploy blockchain technology for ensuring a safer, faster, and more secure payment process.

UAE Exchange expects to go live with Ripple as early as Q1 2019, “with one or two Asian banks” expected to begin accepting blockchain-based remittances.

RippleNet has more than a hundred partner banks and financial institutions, enabling messaging, payments, clearing of securities, and quick settlement of transactions across all members. The most prominent institutions include lenders National Bank of Ras Al Khaimah, Kuwait Finance House, and the local arm of global bank Standard Chartered.

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CBDC for Cross-Border Payments

In another development, the Central Bank of UAE is undertaking a joint project with the Saudi Arabian Monetary Authority to issue a blockchain-based digital currency to enable swift transactions between the two borders reported Gulf Times.

Chief Executive Officer of Emirates Investment Authority, Mubarak Rashed Al Mansouri, spoke of the development:

“This is probably the first time ever that witnesses the cooperation of monetary authorities from different countries on this topic and we hope that this achievement will foster similar collaboration in our region.” 

However, Al Mansouri was quick to note that the proposal exists in its research and study stages, with both parties yet to dive deep into the concept. The study is also presumably worked upon by a large group of officials and researchers, with no information of the final team leading the project and the total costs associated with the project available at the time of writing.

Al Mansouri added that the digital currency will strictly be available for use between banks of the two countries, stating, “this would be more efficient…This is between us and the banks.”

Both the central banks of UAE and Saudi Arabia have called out bitcoin and other cryptocurrencies previously, condemning the pioneer cryptocurrency’s price volatility and risks. However, the narrative may change if officials were to understand blockchain technology and its myriad benefits.

Al Mansouri also noted that essential developments in the fintech sector present both a unique opportunity and challenge to understand the risks involved. Both industry players and market participants must cooperate to determine the best way to mitigate risks and enhance the industry.

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At a recent conference, Dan Morgan, an executive with Ripple, says Asia has the “biggest appetite” in terms of demand for XRP.


2018 has been a brutal year for cryptocurrencies. Bitcoin has fallen from its all-time high of nearly $20,000 back in mid-December 2017 to just over $4,000 today. However, Ripple (XRP) has actually had a pretty sterling year as it continues to make inroads into the worldwide banking system. At a recent conference, Dan Morgan, Head of Regulatory Relations for Europe, offered some opinions on what markets hunger for XRP.

Big in Asia

At the CryptoCompare & MJAC London Blockchain Summit, Dan Morgan was asked about what regions Ripple had the most presence in. He replied:

It’s very early days, but we see the biggest appetite in Asian markets, in terms of demand, so remittance demand, whether it is corridors that are under-served because correspondence banking is too costly… So, we feel that there is demand.

 

Liquidity, in terms of digital assets, most liquidity we have… is in Asian markets by some distance.

South Korea

However, Morgan didn’t say everything was perfect in Asia. He discussed the need for clarity when it comes to regulations that impact cryptocurrencies and blockchain. He said:

Again, we see a number of pockets around Asia where they are further ahead that we are here… Thailand, I talked about. Obviously, Japan is another place …

 

So, you are absolutely right, it is Asia. I wouldn’t want to pin down exact markets… In Thailand, for instance, with that regulation, I think Siam Commercial Bank… is really active now in terms of settlements, digital assets activity.

Ripple Going Strong

XRP has dropped from over $3 at the beginning of the year down to 36 cents today. While the price has been woeful for those who bought it early in the year, Ripple has been making tremendous strides throughout 2018 on a different front.

Ripple (XRP)

Ripple’s offerings, such as xRapid, have been doing extremely well. Each month brings a few more banks into their network, such as Banco Santander and Saudi Arabia’s National Commercial Bank. The San Francisco-based company is expanding greatly into the Middle Eastern market and has opened an office in Dubai.

The company’s latest earnings report shows that XRP sales doubled in the third quarter of 2018 in comparison to the previous quarter. The company also flexed their payment remittance might by sending $50 million in just 2 seconds, and all for a mere cost of 30 cents.

XRP is doing so well that it took over the second place spot on the cryptocurrency top ten chart from Ethereum. Currently, XRP has a market cap of $14.5 billion while Ethereum has $11.7 billion.

What do you think about how Ripple is faring this year? Let us know in the comments below.

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