National Bank of Abu Dhabi said on Wednesday it had become the first bank in the Middle East and North Africa to introduce real time, cross-border payments on blockchain, becoming the latest lender to use the technology.
Through a partnership with Ripple, a U.S. start-up specialising in blockchain technology, NBAD said it would allow customers to cut the cost and speed of payments.
“With blockchain, we hope that we could address the needs of our customers and drive forward more efficient and flexible service. Embracing technologies like Blockchain is a step in right direction for our customers,” said Vineet Varma, Managing Director & Head of Global Transaction Banking, NBAD .
Several other banks have already partnered with Ripple, which uses the blockchain technology that underpins digital currency bitcoin to help banks speed up their dealings with one another, including Santander, Standard Chartered and Unicredit. Standard Chartered is also an investor in the company.
“Banks and their customers have been hearing about the promise of blockchain technology to enable real-time cross-border payments. Now, some of the most innovative and successful banks like NBAD are making this a reality by offering Ripple-enabled payments to their entire customer base, and in doing so, paving the way to make 2017 the year we see broad commercialization of blockchain take hold globally,” said Brad Garlinghouse, CEO of Ripple.
Blockchain works as an electronic transaction-processing and record-keeping system that allows all parties to track information through a secure network, with no need for third-party verification.
NBAD’s move follows an announcement in October by the UAE’s largest lender, Emirates NBD, that it was working with Indian bank ICICI on a pilot project to use blockchain technology for global remittances and trade finance.
The United Arab Emirates accounts for more than $19 billion of remittances per year, ranking it fourth in the world, according to World Bank data.
(With inputs from Reuters)