Ripple(XRP), the name behind the third largest cryptocurrency right now in terms of both price and market, has recently announced its intention of setting up shop in Dubai soon. The decision to establish a Dubai office by the end of this year bears testimony to the growing prominence of Middle East in the world fintech market. Dilip Rao, who heads Ripples Global Infrastructure Innovation division, spoke at a recent event, the Global Islamic Economic Summit and his speech suggested that Ripple is increasing its emphasis on facilitating cross-border transactions.
Rao emphasized that this wouldn’t be Ripple’s first foray into the Middle East as it has earlier collaborated with several financial institutions active in that region. Speaking of Ripple’s long association with the Middle East, Rao said :
“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.”
According to World Bank data, Middle East is one of the largest sources of remittances globally, as many migrant labourers work in these countries and send money back to their homes. Naturally, this makes the area great for payments firms to operate and make great profits. Back in 2016, just Saudi Arabia alone was said to have had a foreign worker population of a little over 10 million. Ripple has also collaborated with institutions in Saudi Arabia, an example of which is Ripple’s deal with the National Commercial Bank of the country. The deal is expected to include the retail bank in Ripple’s enterprise blockchain network called RippleNet. As a result, it will be able to be linked up with Asian and North American entities or companies.
Rao harped on the fact that the blockchain and fintech solutions Ripple was offering were fully compliant with Sharia Law, the Islamic religious legal system that guide most Middle Eastern countries’ legislation. Moreover, as he pointed out, legacy systems, or earlier money remittance systems, are much more expensive and inefficient compared to fintech solutions. Moreover, blockchain-based solutions are also better than new proprietary solutions: that they are not suited to payments that are low-value and high-volume. Ripple plans to fill this gap, while working on the compliance and adherence aspects of these as well.