Ripple value tipped to boom following Saudi Arabia deal
US-based Ripple has signed a new agreement with Saudi Arabia’s central bank.
The new contract will help banks settle payments using blockchain software.
The deal indicates a move from traditional banking methods as Gulf regulators explore new financial technology.
First of its kind
The Saudi Arabian central bank will be the first to launch a program of its kind.
The pilot scheme will allow banks in the Arab nation to settle payments instantly, in and out of the country, using Ripple’s software.
Ripple said that the deal would allow Saudi banks to make faster, cheaper and more transparent cross-border transactions.
In a statement, Ripple said, adding that the central bank would provide training to Saudi banks interested in the program.
Initial skepticism faded
Many regulators in the Gulf had initially expressed skepticism about fintech.
Last year, the Saudi central bank warned citizens against trading Bitcoin, claiming it was outside the bank’s regulatory reach.
Bahrain, however, has been keen to boost its position as a regional financial center and has been exploring the use of digital currency in multiple applications.
Regulators in other Gulf economies have followed this example, expressing growing interest in crypto.
UAE central bank governor Mubarak Rashed al-Mansouri said in December that the Saudi central bank is working with the United Arab Emirates central bank.
According to al-Mansouri, the two nations are seeking a cryptocurrency that would accept transactions cross-border, between both countries
The regulator of Abu Dhabi’s international financial center said earlier this week that it might create rules for exchanges handling digital currency.
In an announcement on Sunday, the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market said it is “reviewing and considering the development of a robust, risk-appropriate regulatory framework to regulate and supervise activities of virtual currency exchanges and intermediaries.”