Ripple has announced that it will be setting up an office in Dubai, United Arab Emirates before the close of 2018.
Speaking during this year’s Global Islamic Economic Summit that was held in Dubai, Ripple’s global infrastructure innovation head, Dilip Rao, indicated that the focus of the fintech firm would be on cross-border payments. In his speech, Rao pointed out that Ripple was not a stranger in the MiddleEast, having already partnered with various financial institutions operating in the region.
“We now have three banks in Saudi Arabia, two in Kuwait… one in Bahrain, one in Oman… a couple in the UAE [United Arab Emirates]… and it really is out fastest growing marketplace,” said Rao.
Remittance Capital of the World
Per statistics from the World Bank, a couple of Middle Eastern countries are some of the largest sources of remittances in the world, owing to their huge foreign worker populations, making the region a lucrative market for payments firms. In 2016, Saudi Arabia was estimated to have a foreign worker population of more than 10 million.
As previously reported by CCN one of the banks in Saudi Arabia that has inked a partnership with Rippleis the National Commercial Bank, which boasts of more than five million customers spread across the globe. The deal, which was announced in mid-September, will see the Saudi retail bank join the enterprise blockchain network of the fintech firm, RippleNet, thereby connecting it to financial institutions located in Asia and North America.
Being a predominantly Muslim region, Ripple’s global infrastructure innovation head was quick to point out that the blockchain products and solutions that the company is building comply with Sharia Law:
“Being able to know what are the underlying assets to a transaction…being able to identify the participants to a transaction…being able to be clear about the contractual roles and responsibilities and being able to reduce risks are all aligned with Sharia Principles.”
Legacy Systems Losing Clout
On the legacy money remittance services, Rao commented that they were not only expensive but also slow and inconvenient. In the case of the Society for Worldwide Interbank Financial Telecommunication(SWIFT) system, Ripple’s global infrastructure innovation head stated that it had been abandoned by banks in some parts of the world such as South Asia and new proprietary technologies were being used instead.
However, Rao pointed out that the new proprietary technologies were not without their faults as they were not especially suited for low-value high-volume payments. According to Rao, the answer to this problem is blockchain technology, and Ripple is working hand in hand with banks to develop solutions that meet the compliance requirements of financial regulators.