As more institutions in the MENA region look to adopt a crypto strategy, demand in the region is increasing for more crypto-enabled cross-border remittance services, according to a senior official at Ripple, the global enterprise blockchain and crypto solutions firm.
“We have seen a lot of interest from MENA institutions in using On-Demand Liquidity (ODL) to support the remittance services they offer, and we already have local payment service providers like Pyypl using the solution to facilitate remittances. between the UAE. and other countries around the world,” she told Zawya Navin Gupta, Managing Director, South Asia and MENA, Ripple.
“Our customers and partners in the region are making use of our ODL crypto solution to facilitate cross-border payments as MENA continues to be a growing region for remittances. We look forward to further expanding our presence in the region as our business grows there,” he added.
Through Ripple’s payment network, RippleNet, its customers can leverage the digital asset (XRP) for cross-border payments directly through a crypto wallet, allowing for lower-cost transactions and instant settlement. XRP is a cryptocurrency and the native token of Ripple
The companies use Ripple’s cross-border payment technology, and their customers are mainly banks, payment service providers, and other fintechs. The total volume of payments on its RippleNet payment network is over $15 billion, and its global ODL volume has increased nine-fold year-over-year.
“We have seen a lot of interest in our services in MENA. We have partnerships with several leading banks in the region, including SABB in Saudi Arabia and QNB in Qatar. We are also working with local payment service providers such as Pyypl and LuLu Money, which use Ripple. [ODL] cryptographic solution to facilitate global movements between different currencies,” said Gupta.
Despite technological advances, he said, cross-border payments remain a challenge for payment service providers and small and medium-sized businesses (SMEs), which are left pre-funding accounts and holding on to trapped capital that could be better implemented to help grow. and scale your business. .
By leveraging crypto liquidity, he added, Ripple is able to bring new products to market that are not possible with legacy systems.
ODL allows the treasurers of both companies to obtain the foreign currency liquidity they need, freeing up working capital and avoiding the need to pre-finance we accounts based on projected volumes.
ODL is now available in nearly 40 payment markets, representing roughly 90% of the $6 trillion daily forex market, which Gupta described as a major milestone toward global coverage.
“Instead of replicating what happens in the physical world and making it digital, we are offering customers a whole new way of doing business. This gives customers more flexibility and choice while reducing friction in the payment flow. It also gives our customers the ability to quickly grow and scale with new partners and currencies by simplifying the onboarding process and enabling payments across multiple currencies,” Gupta said.
United Arab Emirates as Crypto Hub
Gupta noted that it wasn’t too long ago that cryptocurrencies had negative connotations and many traditional financial institutions were very hesitant to discuss them, let alone integrate them into their products, but in more recent times, his firm has seen traditional financial institutions feel more comfortable with the idea of adopting cryptocurrencies to solve real problems of their business in regards to remittances and treasury payments.
“While traditional financial institutions have been slower to adopt, MENA is certainly seeing an increase in new services and adoption in the region by both consumers and businesses,” he added.
Gupta noted that the UAE is now home to many influential crypto companies, creating an opportunity for the developer ecosystem to thrive. “Several of these developers are choosing to build on top of the XRP Ledger (XRPL). Developers can apply for a grant from the XRPL Foundation and/or Ripple to create relevant solutions for the MENA market.”
Furthermore, he added, NYU Abu Dhabi is a partner of the University Blockchain Research Initiative (UBRI), and Ripple has been working with the institution on a group of startups to activate the ecosystem in the region.
Future of global payments
Ripple is engaging with lawmakers and regulators in the MENA region as they seek to develop frameworks to support digital assets.
“We are seeing increasing interest from regulators in the MENA region in providing clarity on the nature of digital assets, as well as clear regulatory frameworks to support digital asset activities, including payments,” Gupta said.
He added that innovation in the space will be driven by a regulatory environment that welcomes technological and crypto advances and understands that it is the future of global payments.
(Reporting by Sunil S; Editing by Seban Scaria)