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Ripple Announces Middle East Partnership, Says XRP Will be Used

Ripple Announces Middle East Partnership, Says XRP Will be Used
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Source: iStock / isa_ozdere

US-based fintech company ripple It announced that it will deploy an on-demand liquidity (ODL) solution based on XRP in the Middle East in partnership with a local company, as the first application of its kind in the region.

The new ODL will be launched in partnership with a blockchain company in the Middle East PyyplIt will initially focus on bringing low-cost remittances to the UAE through “using ODL and leveraging XRP,” Ripple said.

Moreover, the two companies said that Ripple’s ODL solution will reduce “inefficient use of capital” by eliminating “costly pre-funded accounts” usually required for cross-border payments.

Brooks Entwistle, RippleNet’s managing director for the region, was quoted as saying: “The MENA region remains an important region for Ripple thanks to its outstanding client list, a welcoming regulatory environment and a regional focus on the improvements needed in the existing financial system.” saying in the ad.

According to a report from a consulting firm McKinseyThe Middle East is home to two of the world’s three largest remittance corridors, located in the United Arab Emirates and Saudi Arabia. The two countries collectively saw payments of $78 billion in 2020, which is 7% of the two countries’ GDP.

Ripple’s announcement stressed that “XRP will not be held within the UAE,” while also saying that transactions will not include the national currency, the AED, “as part of the payments flow.”

This week’s announcement from Ripple follows an announcement in July that the company was setting up a remittance corridor between Japan and the Philippines.

Despite the promising near-instant settlement at low costs, Ripple has struggled in the past to get its partners to use XRP for liquidity. One of the major Spanish banks has been among the partners that have been reluctant to use XRP in the past Santander He pointed out that the token does not have the required liquidity in enough markets to support their needs.

According to Brad Garlinghouse, CEO of Ripple, the issue is not liquidity, but rather the uncertainty in the US about whether or not XRP will be classified as collateral.

At 15:34 UTC, XRP is ranked seventh in terms of market capitalization and is trading at $1.02 which is down 8% on the day and 6% on the week.
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