There has been speculation of central banks regulating cryptocurrency. Now Ripple, the third largest cryptocurrency (by market cap) has stepped up. The company has signed a deal with the central bank of Saudi Arabia. it’s just paved its way closer than ever to the traditional financial sector.
What’s the significance you may be wondering, seeing as the banks were speculating? Well, Ripple is being rolled out by Banco Santander in four countries for Q1 2018. The U.K. branch confirmed its plans to work with American Express. Using Ripples blockchain technology. Ripple had access to Dubai’s UAE Exchange and made a deal with Lianlian International. Not just that, but Western Union is planning on testing XRP transfers.
Ripple & Dubai, leading together
Ripples own enterprise software, xCurrent will enable end-to-end tracking and payments. Blockchain software is famous for enabling instantaneous transactions. Saudi Arabia is no doubt looking to utilize the technology for cross-border payments.
Ripples deal signals the first of what may be many programmes to come. Dilip Rao, head of infrastructure innovation at Ripple, has given us some insight. There seems to be recognition of the success that blockchain technology is. The result in its performance of cross-border payments? Lower trade barriers and commerce. Saving for corporates and customers alike.
There have been concerns with virtual currencies. One such currency is Bitcoin, which we saw reach a peak of over £20,000 at one point. The non-existent regulation of cryptocurrencies horrified regulators worldwide. Ripple has promoted itself as the blockchain equivalent of traditional financials. In contrast, Bitcoin and others have marketed themselves as deregulated and decentralized currencies.
Speaking of regulation. Many investors take notice that a large volume of XRP tokens is owned by the parent company of Ripple. Therefore, Ripple could regulate its own price. XRP has seen a high of approximately $3.84 as recently as January 4th. As with all volatile markets, its stability is not guaranteed. It stooped back down to $1.12 recently.
Seemingly, Dubai is taking the lead in the charge. The governor of the UAE central bank – Mubarak Rashed al-Mansouri – spoke of collaboration. UAE and Saudi Arabia are working closely in order to release a digital currency.