After Blockchain Push, UAE Investigates Ripple (XRP) and a National Cryptocurrency

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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 .

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.

Source: https://btcmanager.com/