The Ripple platform signed an agreement with the central bank of Saudi Arabia to implement its blockchain in improving the banking payment infrastructure.
The Saudi Arabian Monetary Authority (SAMA) will coordinate a pilot program with Ripple on the xCurrent protocol, which will enable instant and low-cost payments both within the country and outside the Arab kingdom. It is the first time that a central bank implements a pilot of this style, according to the Ripple statement.
The xCurrent software, a Ripple development, allows transactions to be effectively carried out among the participants of the RippleNet through the Interledger protocol, which connects different portfolios and payment networks providing cryptographic security for movements, thus enabling different financial entities to coincide in the same interconnected ecosystem.
In addition, the alliance will benefit the banking authorities of Saudi Arabia and other participating institutions with advice on the subject. Ripple reports that this adoption of xCurrent is the second one made by a central bank, after the Bank of England carried out a proof of concept during the past year.
Dilip Rao, Ripple's Global Innovation Director, said that banks are migrating towards the solutions provided by blockchain for the cross-border payment industry, whose technology is dissipating the obstacles for both companies and users. Rao continues his statement noting that SAMA is the first central bank to provide these resources to local banks through the Ripple blockchain solution.
In fact, it was recently learned that the UAE Exchange, an international platform for foreign exchange markets, remittances and payment provider, established in the United Arab Emirates, joined Ripple to integrate blockchain to its services, becoming the solution provider of largest payments in the Middle East in using Distributed Accounting Technology.
WESTERN UNION WILL ALSO TRY THE RIPPLENET
But private banking has also been added to Ripple to perform tests in this blockchain network. It was recently reported that Western Union also seeks to streamline its transactions and payments through this platform.
According to the sources, its CEO, Hikmet Ersek, reported the new strategy to its analysts last Tuesday. The CEO decided to highlight the difference between cryptocurrencies and blockhain when asked about the role of these in the solutions to transfer money:
"First, we must make differences between cryptocurrency and blockchain. Blockchain is something interesting as an application, and we will use it in several sectors [...] "he assured, according to the transcript.
A month before, it was learned that Moneygram also joined Ripple for the purpose of making international payments, being a market competition of Western Union. Likewise, this year we learned of the launch of an application for international payments based on Ripple by Santander. In addition, a week ago it was reported that LianLian Pay, China's fourth largest non-bank payment service provider, announced its integration with Ripple to optimize its remittance service, bill payment and cross-border digital business payments.
Although XCurrent technology is being used by banks, XRapid, another software that integrates Ripple's blockchain technology to provide transactions with more liquidity, can not be ignored, allowing a number of funds to be channeled among its different creditors.
Although Ripple has been designated as a blockchain of centralized and arbitrary nodes, its market behavior seems to support what has been one of the providers of blockchain solutions most served by the global banking sector. The growth of the cryptoactive XRP has been remarkable during the last months. Currently it is located in the third place of cryptocurrencies with the highest market capitalization with around 44 billion dollars and a price of $ 1,13 dollars, after having cost in early January up to $ 3,65 dollars according to the portal CoinMarketCap.