Saudi Arabian Monetary Authority (Sama), the country's central bank has inked a deal with US-based Ripple, a key provider of real-time gross settlement system and currency exchange, to help banks boost their payments infrastructure using its blockchain technology xCurrent under a pilot programme.

This ground-breaking programme is a first-of-its-kind to be launched by a central bank.

Under this, all participating banks from Saudi Arabia will use xCurrent to instantly settle payments sent into and out of the country, with greater transparency and lower costs, said a statement from Ripple.

Sama’s use of xCurrent has the potential to radically shift how banks in the country send money globally, it stated.

Saudi Arabia now has access to every financial institution (banks and payment providers) on RippleNet, which will not only help modernize their payments systems, but also further their reach into major corridors.

Additionally, the banks’ customers will experience faster, cheaper and more transparent cross-border transactions.

Under this programme Sama will provide interested Saudi banks with management and training.

Ripple said the central bank's use of xCurrent will help fuel global momentum for blockchain.

Dilip Rao, the global head of infrastructure innovation at Ripple, pointed out that the agreement with Sama was part of a wave of recognition by financial institutions of the impact blockchain solutions can have on payments.

"Sama’s recent adoption of xCurrent, makes it the second central bank to use blockchain technology to revolutionize payments, following the Bank of England’s successful proof of concept with Ripple in 2017," he stated.

According to him, Sama joins over 100 financial institutions who already rely on Ripple to power end-to-end tracking and instant settlement for their payments around the world.

The addition of Saudi central bank is part of a larger global trend favouring blockchain solutions for payments.

“Central banks around the world are leaning into blockchain technology in recognition of how it can transform cross-border payments, resulting in lower barriers to trade and commerce for both corporates and consumers,” remarked Rao.

“Sama is leading the charge as the first central bank to provide resources to domestic banks that want to enable instant payments using Ripple’s innovative blockchain solution,” he added.-TradeArabia News Service