International Finance

Saudi Central Bank and Ripple to carry pilot test for cross-border transactions

Ripple, Saudi Central Bank, Moody’s Investor Service, blockchain, cross-border payment, pilot project, CoinDesk, Western Union, GCC, money transfer, forex, fintechs
The pilot project using blockchain could save banks up to US$400mn

US fintech startup Ripple has signed a blockchain deal with Saudi Central Bank to test a pilot project on cross-border payments.

Ripple on CoinDesk said, “This ground-breaking pilot program is the first of its kind to be launched by a central bank. Participating banks from the [Kingdom of Saudi Arabia] will use xCurrent to instantly settle payments sent into and out of the country, with greater transparency and lower costs.”

Most GCC countries are focused on fintechs to enhance their banking efficiency. UAE’s money transfer and forex giant Western Union has also partnered with Ripple to push real-time cross-border payments using blockchain.

Western Union CEO Hikmet Ersek told Bloomberg, “We are looking especially in the processing settlement and working capital optimization, also in the regulation part, on the compliance part on the blockchain capabilities. And we do test, we do have some tests with Ripple.”

Saudi Arabian could easily save up to US$400mn each year using the blockchain software, according to Moody’s Investor Service.

The Moody’s Report reads “Moody’s estimates that even a 10 percent reduction in the cost of completing and managing a cross-border transaction will translate to savings of roughly $200m-$400m per year system-wide.”

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