Today a local newspaper reported that the National Bank of Egypt has signed a deal with Ripple to help to lower the cost of money remitted to the country. It believes blockchain will bring speed and efficiencies to cross border payment channels with other Arab Gulf states as well as countries such as the United Kingdom, U.S. and Canada.
According to World Bank statistics, inward personal remittances amounted to 10.2% of Egypt’s GDP in 2018. And it ranked fifth in terms of global inward remittances at $29 billion. The World Bank says the cost of remitting the equivalent of $200 from Qatar to Egypt is 3.22% at a minimum, with a simple average of 6.7%. Other averages are 3.22% coming from Kuwait, 3.55% from the UAE and 5% from the U.S.
Ripple has two solutions, the blockchain-based payment messaging system RippleNet and the On-Demand Liquidity solution (ODL), which uses XRP.
The vast majority of banks that sign up with Ripple adopt RippleNet. These include the likes of Santander and MUFG. And money transfer companies tend to use ODL. At this stage, it’s unclear which one the National Bank of Egypt has adopted, but the description sounded like RippleNet.
Ripple recently completed a $200 million round of funding and has dropped hints about an IPO.