UAE Exchange, an arm of United Arab Emirates-based payments and foreign exchange firm Finablr, has announced that it will be launching a blockchain-based payments platform using the Ripple technology.
As reported by Reuters, the new remittance platform will facilitate payments in the Asian region by the first quarter of 2019.
CEO Promoth Manghat said that the platform would likely be launched with support from a couple of banks in Asia that use Ripple’s xCurrent platform.
Some of the financial institutions in the Middle East region that have joined RippleNet include Kuwait Finance House and the National Bank of Ras Al Khaimah.
The UAE has an ever-growing number of immigrant workers from several Asian countries and from around the globe.
The large numbers of workers from countries like India, Pakistan, and the Philippines means that the corridor accounts for the country’s largest remittance inflows.
Gulf Business reported in May this year that remittances surged by over 17 percent for the first quarter of 2018.
According to the report, funds sent to India constituted about 36.7 percent of total remittances and had contributed to over $80 billion already in 2018.
Transfers to Pakistan accounted for about 8.8 percent, while the Philippines reportedly accounted for 6.9 percent of all remittances at the beginning of 2018.
The UAE Exchange hopes to tap into this market and has noted that it represents excellent growth potential.
However, the platform, whose website boasts of having partnerships with nearly 140 banks and is established in 31 countries, has remained cautious about cryptocurrency and fancies more significant improvements before potential translates into widespread blockchain adoption.
Manghat said that “blockchain holds tremendous promise for the industry,” although did also note that the industry needs “progress to be made before we see it go fully mainstream.”
UAE Exchange’s alliance with Ripple with the aim of enabling the public to make cheaper and faster cross-border payments first began in February, and as Reuters noted in its report, the exchange has grown to become one of the largest in the region.
According to Dilip Rao, Ripple’s Global Head of Infrastructure Innovation said that partnering the UAE Exchange was necessitated by the need to solve “inefficiencies in key corridors where payment flows are significant and growing.”
“Adding a market leader like UAE Exchange to RippleNet will bring instant, certain, low-cost payments to the millions of retail customers in the UAE who send money abroad.”
Over the last several months, Ripple has inked partnerships with a number of financial institutions around the world, most aimed at facilitating the use of blockchain technology to drive the payments and remittances industry.
These include partnerships with U.S based PNC Bank, CIMB- a Malaysian banking group, and Coinone, a South Korea based cryptocurrency exchange.
The global remittances market continues to expand rapidly, with the Asia-Pacific region accounting for $256 billion sent to families by expatriate workers.
The World Bank has projected that global remittance for the year will hit $642 billion, up by about $30 billion over 2017 figures which saw $613 billion payments sent across the world in 2017.
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