Ripple, the San Francisco-based blockchain company behind the world’s third-largest cryptocurrency, XRP has announced it is entering the Middle East through an office in the UAE.
Dubai would join Ripple’s network of offices in San Francisco, New York, London, Sydney, India, Singapore and Luxembourg.
Speaking during this year’s Global Islamic Economic Summit that was held in Dubai, Ripple’s global infrastructure innovation head, Dilip Rao, indicated that the focus of the fintech firm would be on cross-border payments.
“If you want to send this money, particularly you’re not clear about what the fees are going to be that the bank is going to charge on the other end. And therefore, what you’ll receive might be substantially less than what you sent out.
“And if you’re sending money for blue collar workers, this often can be a small amount of money, $200, and the fees for these kinds of small payments can be as high as 5 to 10%. So this is actually hurting the people who can afford it the least,” Rao said.
Middle Eastern countries are some of the largest sources of remittances in the world, owing to their huge foreign worker populations, making the region a lucrative market for payments firms, according to statistics from the World Bank.
In 2016, Saudi Arabia was estimated to have a foreign worker population of more than 10 million.
Being a predominantly Muslim region, Ripple’s global infrastructure innovation head was quick to point out that the blockchain products and solutions that the company is building comply with sharia law. Something that is becoming increasingly common, as reported by International Investment.
“Being able to know what are the underlying assets to a transaction, being able to identify the participants to a transaction, being able to be clear about the contractual roles and responsibilities and being able to reduce risks are all aligned with sharia principles,” Rao said.
He added that Ripple has already signed about 200 institutions from different countries with many of them being from the Middle East. The list of clients reportedly includes the Saudi Arabia’s Al-Rajhi Bank, as well as Kuwait Finance House.