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The Saudi Arabian Monetary Authority (SAMA) has signed an agreement with the U.S.-based blockchain company Ripple to help participating banks in the kingdom use its enterprise software to instantly facilitate cross-border payments.
The pilot program is the first of its kind to be launched by a central bank, the company said in a statement. The central bank’s partnership with Ripple will potentially transform how banks in the Kingdom send money globally, while allowing bank customers access to faster, cheaper and more transparent cross-border transactions. As part of the deal, SAMA will also provide interested banks in Saudi with program management and training.
SAMA is the second central bank globally to introduce Ripple’s blockchain-based cross-border payments platform, following the Bank of England’s pilot project in 2017.
“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, the global head of infrastructure innovation at Ripple. “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.”
Ripple’s cryptocurrency is currently the third largest on the market, behind Bitcoin and Ethereum. At the time of press, Ripple’s cryptocurrency was trading at $1.14, with a total market cap of about $1.2 billion, according to CoinMarketCap.
The move by Saudi Arabia’s central bank is evidence that regulators and governments in the Middle East are beginning to embrace blockchain technology and financial technology as a whole, even as doubts persist about cryptocurrencies.
Regulators across the region have expressed concern about trading in Bitcoin, and regulatory frameworks governing cryptocurrencies appear to be advancing. Earlier this month, the regulator of Abu Dhabi Global Market announced it’s considering rules for virtual currency exchanges.
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