Ripple, the blockchain payments technology company, announced Wednesday (Feb. 14) that it has inked a deal with the Saudi Arabian Monetary Authority (SAMA), enabling banks in the Kingdom of Saudi Arabia to work with its cross-border payments technology.
In a press release, Ripple said it and the SAMA have developed a pilot program — a first-of-a-kind by a central bank — that will enable Saudi Arabia banks to use xCurrent, Ripple’s software that allows banks to settle cross-border payments instantly and have end-to-end tracking, thanks to blockchain. SAMA will provide the program management and training to the banks, Ripple said in the press release, and noted that with xCurrent the banks will be able to process cross-border payments in seconds and for a cheap rate.
"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,” said Dilip Rao, Ripple's global head of infrastructure innovation. “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.”
The deal with SAMA comes as Western Union states that it "is examining blockchain technology, and at the same time is testing transactions with Ripple. The CFO told Bloomberg that actions are still in a 'testing phase' and that there is nothing yet that would be considered a big 'unlock.'”
During an earnings call this week, an analyst asked about blockchain. Western Union’s Chief Executive Hikmet Ersek said that “as a financial institution, we do look at blockchain in general and we’ve been doing that for some time, I would say, and we are looking especially in the processing settlement and working capital optimization, also in the regulations part, on the compliance part on the blockchain.”
Ersek noted the aforementioned Ripple test and said in reference to crypto, “it’s not something to report that we’re going to change the environment, our existing capability is very stable, as you can see from our performance, but that’s something that we are taking seriously and looking at and testing.” During the call, at a later time, Ersek told analysts that “on the crypto currency side, look, currency is currency. I think the big advantage we’re seeing globally is that we turn any currency to a use case.”
According to a Ripple spokesperson, “We’ve been testing different products with Western Union for a while. We’re excited about our work towards a pilot implementation of xRapid, which uses XRP in payment flows.”