US blockchain technology company Ripple linked up with Pyypl, a Middle East FinTech, to introduce RippleNet’s first on-demand liquidity solution for cross-border payments between the Middle East and the Philippines.
The ODL solution enables RippleNet, a network of banks and money services businesses that employ solutions developed by Ripple, to use the XRP digital currency as a bridge between two fiat currencies, allowing them to transfer funds economically and instantly across jurisdictions.
This will eliminate the need for costly pre-funded destination accounts, the two companies said on Tuesday.
“The Middle East and North Africa continues to be a critical region for Ripple thanks to … a welcoming regulatory environment and a regional focus on the needed improvements in the current financial system,” said Brooks Entwistle, managing director of RippleNet in the Asia-Pacific and Mena regions.
“The establishment of yet another first-to-market ODL launch demonstrates that digital assets will play a central role in the future of global payments.”
The establishment of yet another first-to-market ODL launch demonstrates that digital assets will play a central role in the future of global payments
Brooks Entwistle,
managing director of RippleNet in the Asia-Pacific and Mena regions
The Middle East contains two of the world’s three largest remittance corridors, with the UAE and Saudi Arabia handling a combined $78 billion ($286.5bn) in payments in 2020, according to the World Bank.
The Mena region also experienced a rapid transition to digital in the last year, making it a market that is primed for FinTech innovation.
Outward personal remittances from the UAE dropped by an annual 5 per cent – or Dh8.3bn – in 2020, according to the UAE Central Bank’s annual report.
Transfers through exchange houses fell by Dh18.1bn, or 13.8 per cent, but outward remittances through banks increased by Dh9.8bn, or 28.8 per cent, the regulator said.
Ripple uses cryptocurrencies to tackle challenges associated with cross-border payments.
By using ODL, financial institutions and small and medium enterprises can tap into previously trapped, pre-funded capital to grow their business, the companies said.
Founded in 2012, Ripple’s blockchain technology is currently used by hundreds of financial institutions across more than 55 countries.
“We are excited to be Ripple’s first partner of choice to bring the deployment of ODL to the Middle East. This enables our users to deliver remittances instantly and cost-effectively,” said Antti Arponen, co-founder and chief executive of Pyypl.
“We have also reduced our inefficient use of capital through ODL and look forward to an exciting roll-out of its capabilities across the region.”
Pyypl, which is licensed by the Abu Dhabi Global Market’s Financial Services Regulatory Authority, started with ODL services in the Philippines.
It plans to expand to new markets and explore additional use cases.
The digital currency XRP will not be held in the UAE and transactions will not involve UAE dirhams as part of the payment flow, the companies said.
In the Asia-Pacific region, Ripple announced its first-to-market ODL corridor in Japan in partnership with SBI Remit and acquired a 40 per cent stake in cross-border payments company Tranglo in Malaysia to expand the availability of its ODL service, the companies said.
The US Securities and Exchange Commission sued Ripple and two of its executives in December for allegedly misleading XRP investors.
The company and its executives, who are also significant security holders, were accused of raising more than $1.3bn through an unregistered, ongoing digital asset securities offering.
Pyypl enables digital payments for the one billion smartphone users in the Middle East and Africa who are financially underserved.
Professional network LinkedIn ranked it among the UAE’s top 10 start-ups to work for in 2021.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
The drill
Recharge as needed, says Mat Dryden: “We try to make it a rule that every two to three months, even if it’s for four days, we get away, get some time together, recharge, refresh.” The couple take an hour a day to check into their businesses and that’s it.
Stick to the schedule, says Mike Addo: “We have an entire wall known as ‘The Lab,’ covered with colour-coded Post-it notes dedicated to our joint weekly planner, content board, marketing strategy, trends, ideas and upcoming meetings.”
Be a team, suggests Addo: “When training together, you have to trust in each other’s abilities. Otherwise working out together very quickly becomes one person training the other.”
Pull your weight, says Thuymi Do: “To do what we do, there definitely can be no lazy member of the team.”
US tops drug cost charts
The study of 13 essential drugs showed costs in the United States were about 300 per cent higher than the global average, followed by Germany at 126 per cent and 122 per cent in the UAE.
Thailand, Kenya and Malaysia were rated as nations with the lowest costs, about 90 per cent cheaper.
In the case of insulin, diabetic patients in the US paid five and a half times the global average, while in the UAE the costs are about 50 per cent higher than the median price of branded and generic drugs.
Some of the costliest drugs worldwide include Lipitor for high cholesterol.
The study’s price index placed the US at an exorbitant 2,170 per cent higher for Lipitor than the average global price and the UAE at the eighth spot globally with costs 252 per cent higher.
High blood pressure medication Zestril was also more than 2,680 per cent higher in the US and the UAE price was 187 per cent higher than the global price.
Polarised public
31% in UK say BBC is biased to left-wing views
19% in UK say BBC is biased to right-wing views
19% in UK say BBC is not biased at all
Source: YouGov
