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Moody's: SAMA Deal with Ripple Provides $400 Million to Banks

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Moody's: SAMA Deal with Ripple Provides $400 Million to Banks

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The agreement between Saudi Arabian Monetary Authority (SAMA) and US-based financial technology company Ripple in managing a cross-border transaction of local banks will translate to savings of roughly $200-$400 million per year system-wide, according to credit rating agency Moody's.

On Wednesday, Asharq Al-Awsat reported Arab Exchange Market (AEM) Sec-Gen Fadi Khalaf as saying: "the cost of remittances is about 60 percent lower than cash transfers."

Ripple signed an agreement with SAMA to create the pilot program for cross-border payments, the first of its kind to be launched by a central bank. The agreement will allow participating Saudi banks to explore a solution for cross-border transactions using distributed ledger technology (DLT, or blockchain).

Khalaf indicated that Emirati banks are aiming for similar agreements.

Earlier last week, UAE Exchange entered into an agreement with Ripple to facilitate real-time cross-border remittance payments as it looks to bring the cost of transactions down for its customers.

Chief executive of UAE Exchange Group indicated that the early adoption of this "game-changing technology allows us to offer a competitive service, as it will have an impact on the speed and cost of cross-border transactions."

Ripple's Current program is expected to be implemented by SAMA to enable local banks to deploy cross-border transfers. Saudi Arabia has a large number of expatriate workers, who make a large number of transfers to their countries.

World Bank figures suggest the cost of such transactions is typically 7.1 percent of their overall value, but Moody's said this could halve if blockchain technology was adopted.

Last year, Bank of England completed a proof of concept with Ripple and concluded that DLT showed promise at enabling two separate real-time gross settlement systems to communicate and achieve seamless global interoperability.

Sec-Gen of AEM announced that a number of Arab investors began to consider investing in cryptocurrency after the recent gains, not to mention the bitcoin that peaked at $19 thousand per unit by the end of last year.

Speaking to Asharq Al-Awsat on the sidelines of the Capital Markets Summit in Cairo on Tuesday, Khalaf stated that the future of cryptocurrency in the world will be great, and the Arab region will join the wave.

SAMA said in a statement that it continues to support innovation in the field of digital payments by encouraging local banks to use the latest technologies and methods in this field.

The authority signed an agreement with Ripple two weeks ago in cooperation with a number of local banks to use the company's foreign remittance technology, a new technology that contributes to speeding up payments between countries and reducing their cost. A number of local banks will participate in the initial experience of this technology.

The agreement does not include the company's digital currency (XRP) or the purchase of shares in it, but the project is limited to the experience of transfers between local banks and some banks involved in service in other countries to accelerate these trans-boundary transfers.

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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)

Dr. Abdul Hakim Elwaer, Assistant Director-General of the Food and Agriculture Organization (FAO), stated that the organization will take an active role at COP16, the UN conference on combating desertification, scheduled to take place in Saudi Arabia in early December.

In remarks to Asharq Al-Awsat, he expressed confidence that the conference—the first of its kind in the Middle East—would produce significant outcomes.

Elwaer’s comments came during a roundtable organized by FAO’s regional office in Cairo, attended by a select group of media representatives. The session focused on FAO’s participation in the upcoming conference and the importance of the Rio Trio —the integrated framework of the three major UN conventions addressing climate change, biodiversity conservation, and desertification.

Fida Haddad, FAO’s Program Officer for Land Rehabilitation and Climate Change, highlighted the interconnectedness of the three conventions and noted that COP16 would place a strong emphasis on land and water rehabilitation and their sustainable management.

Haddad pointed out that approximately 90% of the Middle East is affected by arid conditions. Despite this, local communities and Arab governments have made notable progress in addressing desertification and drought. She also announced that, for the first time, FAO has successfully placed food systems on the COP16 agenda, enabling discussions on how land rehabilitation can enhance food supply chains and systems.

Elwaer underscored FAO’s central role in achieving the second Sustainable Development Goal (SDG): eradicating hunger. He emphasized that FAO actively engages in the UN conventions on climate change, biodiversity, and desertification, which collectively contribute to this mission.

FAO’s focus, according to Elwaer, is on transforming food and agricultural systems to become more inclusive, efficient, and sustainable, aiming for better production, nutrition, and livelihoods. He highlighted the organization’s success in integrating these priorities into the agendas of the three conventions and collaborating with host countries on joint initiatives.

He further noted that Saudi Arabia’s hosting of COP16 is particularly significant for the region, which faces pressing challenges such as water scarcity, desertification, and food insecurity. The conference presents an opportunity for Middle Eastern nations to highlight these issues, explore solutions, and ensure their inclusion in global environmental discussions, not only at this event but in future COP sessions, he underlined.

Elwaer emphasized the growing global attention on desertification, as it is now impacting regions previously unaffected, such as southern Europe and parts of Latin America. These areas are witnessing alarming declines in arable land and forests, prompting them to seek lessons from the Arab world, which has developed resilience strategies to combat desertification over centuries.

FAO will have a strong presence at COP16, with two dedicated pavilions—one in the Blue Zone for official delegations and another in the Green Zone to engage civil society and conference participants, he said.

He added that in collaboration with Saudi Arabia and the UN, FAO will lead coordination on Food Day and Governance Day, scheduled for December 5 and 6, respectively. The organization will also participate in other specialized sessions throughout the conference.