Saudi Arabia’s Blockchain Pilot Program Could Save Banks About $400m Every Year

As the news goes, UAE Exchange has declared its arrangement with Ripple money transfer program which permits ‘real-time’ cross-border payments with better speed, transparency and measurably lesser cost.

Fundamentally, soon a pilot program will be launch, which with the utilization of distributed ledger technology (DLT) will help Saudi banks in exploring new cross-borders transactions solution while saving up to $400 million in coming time period.

Proper preparation like program management/supervision and a rundown of other help amenities has been guaranteed to be instigated by Ripple and SAMA. Indeed, to ensure technology is applicably adopted before starting its more extensive utilize, a pilot program has been designed with few banks and minor transactions.

According to Moody’s, with a more extensive community of migrant workers like most other GCC nations, an immense distinction can indicate countless low value remittance transactions to home nations. Additionally, Moody’s investors services included that “Saudi banks will potentially improve their profitability on cross-border transactions by reducing the cost of each transaction while gaining revenue with higher volume as the customer experience improves with the saving of money and time”.

On the off chance that we need to place it in numbers, according to Moody’s estimations, even a diminishment of 10% in the cost of cross-border transactions, can help with saving up to $200 – $400 million every year.

Factors featured while introducing Ripple remittance program,

• An estimated drop of 50% on remittance fees.
• An initiative just to serve as an intermediary between Saudi Arabia’s banks and global banks.
• No guarantee of hasty or impulsive widespread use of distributed ledger technology (DLT) for cross-border payments, even in Saudi Arabia.

Ripple partnerships led its blockchain technology to rule the market

• Definitely Commencing a global move towards blockchain
• A step ahead by the team of Ripple, after successfully completing a proof of concept with the bank of England (using DLT to enable two separate real-time gross settlement system).
• Even though blockchain technology can be still stated as an untested stage for money transactions, this pilot program will definitely assist in addressing the problems linked with interbank transfers and transfers which run through multiple banks.
• With two main products, named as xCurrent and xRapid, the deal in between Saudi Arabia and ripple is based on xCurrent for greater transparency and lower cost. (xCurrent – a ripple enterprise software solution which supports banks in settling cross-border payments instantly’ with complete transparency and end to end tracking).
• More than 100 financial institutions are already working with the ripple to make their end-to-end transactions more transparent and instant settlement of payment.