Saudi Arabian Monetary Authority (SAMA) which is the central bank for the Kingdom of Saudi Arabia (KSA), has signed an agreement with distributed ledger startup Ripple to help its banks improve their payments infrastructure using xCurrent.
The pilot program is regarded as the first of its kind to be launched by a central bank.
Participating banks from the KSA are meant to use xCurrent to instantly settle payments sent into and out of the country, with greater transparency and lower costs.
SAMA's use of xCurrent has the potential to shift how banks in the KSA are sending money globally. And also with the deal, banks in the KSA have access to every financial institution (banks and payment providers) on RippleNet, which should modernize their payments systems and further their reach into major corridors.
On the customers' side, the use of xCurrent is meant to make banking experience faster, cheaper and more transparent.
SAMA in using xCurrent is helping the growth of blockchain, and this is the second central bank to use the technology, following the Bank of England in using Ripple in 2017.
The agreement also makes SAMA in joining more than 100 other financial institution that are already relying on Ripple to power their end-to-end tracking and instant settlement for their payment methods.
"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, who believes the agreement impacts blockchain solutions on payment systems.
“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.”
The news of this deal first emerged earlier in the week after the comments from CEO Brad Garlinghouse at the Blockchain Connect Conference in San Francisco.
The announcement also came just after a day that UAE Exchange, a major remittance company in the United Arab Emirates, had signed on to use the startup's RippleNet product to manage cross-border payments, and a week after LianLian International, a China-based payment services provider, agreed to use Ripple.
