The National Bank of Egypt (NBE), the country’s largest and oldest bank has entered an agreement with Ripple’s blockchain-based payments network RippleNet to establish new channels for inward remittances.
The agreement reportedly makes the National Bank the country’s first to venture into the blockchain sector.
The global remittance market is expected to reach $597 billion in 2020, according to data from the World Bank. According to figures from the World Bank, Egypt is among the top five remittance recipient nations in the world; following India, China, Mexico and the Philippines. As per the figures, migrants sent $29 billion in funds to the nation. Hence, this strategic partnership for Ripple might come out to be a great hit.
Globally, the cross-border money transfer is accomplished by banks and financial institutions, using either Society for Worldwide Interbank Financial Telecommunication (SWIFT) network or Clearing House Interbank Payments System (CHIPS). Banks are dependent on these networks as currently; these are the only two options for cross border payments.
RippleNet network has over 300 international banks and institutions. RippleNet offers an alternate solution for banks to engage in financials outside their respective country. Based on blockchain, the network is decentralised and offers a greatly enhanced experience through speed of transaction, lower charges and military grade security.
By joining RippleNet network the National Bank hopes to access new markets, and to support and extend its remittance business in the Gulf region. National Bank Chair Dalia El-Baz said he expects RippleNet to grow exponentially and to thus provide a boost to the institution’s liquidity management and foreign currency earrings.
Global payment service provider Western Union has also previously tested water with the RippleNet in 2019, looking into the possibility of leveraging the technology.