Ripple has announced that it will soon deploy it’s XRP-based on-demand liquidity solution in the Middle East. This will be in partnership with a local firm and will be the first such roll-out in the region.
The new on-demand liquidity (ODL) will happen in partnership with Pyypl and will focus on bringing low-cost remittances to the UAE by using ODL and leveraging XRP. This is according to a report from Ripple.
The two companies have said that the ODL solution will reduce insufficient use of capital by eliminating costly pre-funded accounts. Such accounts are usually required for cross-border payments.
Brooks Entwistle, RippleNet’s managing director, said “MENA continues to be a critical region for Ripple thanks to our outstanding roster of customers, a welcoming regulatory environment and a regional focus on the needed improvements in the current financial system.”
According to a further report from consulting firm McKinsey, the Middle East is currently home to two of the three largest remittance corridors in the world. These are located in the UAE and Saudi Arabia. Together, the two countries saw $78 billion in payments in 202, making up 7% of their combined gross domestic product.
Ripple’s announcement made it clear that XRP will not be held within the UAE and said that transactions will not involve the national currency AED as part of the payment flow.
The announcement follows another that was made in July which said that the company is setting up a remittance corridor between Japan and the Philippines.
In the past, Ripple has struggled to encourage it’s customers to use XRP to source liquidity. Among these customers is major bank Santander. The bank has indicated that the token does not have the required liquidity in enough markets to support their needs.
According to Ripple’s CEO, the issue is not liquidity but rather uncertainty in the US as to whether XRP will be classified as a security or not.
