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Revealed: Ripple Tested In One Of The Largest Remittances Markets In The World

Our Ripple fundamental analysis focused on the aspect of traction which is the single most important focus point for any startup, inside the crypto sphere or outside of it. In a recent document from Saudi British Bank (SABB), subsidiary of HSBC, it became clear that they are testing Ripple since December 2018 for cross border remittances to Saudi Arabia. Why this is a big deal? More so because Saudi Arabia is one of the largest remittances markets in the world, less so because it’s a subsidiary from HSBC, according to us.

Ripple Test Ongoing In One Of The Largest Remittances Markets In The World

The official document that revealed this can be downloaded here from the site of HSBC: Blazing a transformation trail: Saudi Arabia’s new digital frontier. On page 5 there is this explicit reference to test Ripple, an initiative that went live in December of 2018:

One area where SABB has demonstrated digital innovation in combination with specific local expertise is customised e-Government cash and liquidity solutions. Eslewhere, SABB is busy innovating in the cross-border payments space. “Saudi Arabia is one of the largest remittances markets in the world, so a key focus is improving cross-border payments, making them cheaper and faster for our corporate clients,” says Al Jarbou who is the Head of Global Liquidity and Cash Management at Saudi British Bank (SABB).

“While the central bank is working on domestic instant payments offerings and investigating the possibility of real-time cross-border transactions with the UAE using a cryptocurrency, we are keen to offer instant payments on a global scale as soon as possible,” she explains. As such, SABB is one of the three banks approved by the central bank to test connections with Ripple for instant settlement of crossborder transfers using blockchain technology. “We have just gone live end of December 2018,” she enthuses.

It is easy to mis-understand this. In no way is this suggesting anything about HSBC, the 7th largest bank in the world and the largest bank in Europe in terms of assets under management.

Why This Is Important, And Why Not

For us, the most important thing that stands out is what we said in the introduction: signs of traction.

In order to understand this we have to go back to our fundamental thesis: every cryptocurrency is, in essence, a startup working on service based on crypto on the blockchain. Looking at things from that perspective what really matters is to find product/market combinations that solve real life problems, as per lean customer development principles.

This is what we wrote in our Ripple fundamental analysis article:

Why do we believe that Ripple will survive the competition? Because of the nature of technological advances. Old school companies like Swift have old school technologies. They really are locked into their legacy system(s). They really cannot adapt as fast as a company like Ripple can grow. That’s why we believe that Ripple is creating a phenomenal competitive edge.

There is huge problem that Ripple is solving in the cross border payment services sector. Cross border payments are intransparent, too expensive and take way too long to settle. At the same time the world moves in the opposite direction: everything becomes more transparent, cheaper because of technological advancements, and also faster.

So you see that Ripple aligns an old industry with the new world.

Now THAT is for us important, and the fact they are doing so in a market dominated by big volumes of high value remittances (remember, Saudi Arabia is at the center of the oil market) is a confirmation of how disruptive their technology and service is.

In terms of context why this SABB story is so important one has to understand the digital trend in Saudi Arabia.

Strategically located at the crossroads of Europe, Asia and Africa, Saudi Arabia has historically relied on its merchant roots and oil reserves to drive economic growth. Today, however, as part of a blueprint for a better future, the Saudi government is implementing measures to create a digitally-transformed, diverse economy. For corporate treasurers operating in the kingdom, or considering expansion into the country, this new digital era offers exciting efficiency opportunities and the chance to shape a sustainable future.

SABB is one of the leading financial services group in Saudi Arabia and an associate company of the HSBC Group.Through this unique partnership, SABB provides corporate clients with best practice in-country cash and liquidity solutions, supports local companies’ expansion across the Middle East and beyond, and helps HSBC clients from other geographies to do business in Saudi Arabia – in the same, seamless manner that they do at home.

Note that focus on Ripple, and not XRP (XRP) in this article. Eventually, if Ripple succeeds in their plan, it will over time impact the value of XRP because of liquidity and credibility. That’s what we wrote in our Ripple Price Forecast 2019. By having many users of Ripplenet there will be much more usage of XRP. Moreover, institutional money will enter the space this year as per our 5 Must-Read Cryptocurrency Predictions for 2019 improving the credibility of cryptocurrencies, primarily XRP.

While there is an indirect relationship between XRP and Ripple, it should have been clear that the main point we try to make here is Ripple’s traction, not XRP’s prediction.

Ripple’s contribution to acceptance of blockchain and cryptocurrency

We know there is lots of emotions tied to Ripple and XRP. But the whole cryptocurrency community should be overly excited that Ripple is able to bring in blockchain technology into an industry which is by nature the most impacted by it. Instead of being hostage against blockchain these banks and central banks embrace the benefits that blockchain as well as cryptocurrency bring. Ripple is helping in this effort, and, in doing so, helping the whole cryptocurrency community gain credits. This comes at a time when miserably failed projects show how immature the cryptocurrency community can be, and how selfish some participants are.

Anyone understanding dynamics in corporate environments sees this, and applauds this contribution by Ripple.

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