Ripple is one of the most important companies in the world of cryptocurrencies. It has been extended to many different financial institutions and continues to do so. Dilip Rao, Ripple's global infrastructure manager, said that company products can help strengthen Islamic finance.
There are several Islamic financial institutions that are working with blockchain technology or are planning to work with it. These companies are considering distributed ledger technology (DLP) as a tool for sharia that would be able to improve cross-border payments, financial inclusion and comply with Sharia certifications.
The traditional banking system is sometimes not ideal for Islamic institutions. This is why they are looking for new systems that can help them improve their performance.
One of these networks that is helping the Islamic financial sector is Ripple. The general director of the Shariyah Review Bureau, Mansoor Munir, explained that Islam recommends solutions that help solve the problems facing humanity.
At the same time, Dilip Rao explained in a tweet uploaded a few hours ago that Islamic banks can engage with Ripple and transform their systems to extend their reach.
I live in Saudi Arabia. The number of workers here from neighboring countries is staggering. I'm here just for a reason, to send money home! This is your ladies market! Good luck…
– Ben Chambers (@ bassben411) 2 November 2018
The Islamic finance industry faces problems that could only be solved using generalized accounting (LDT) technology. One of these problems is to resolve the contract and validation in accordance with Sharia law.
This is why there are several Islamic banks that are looking for different ways to start using blockchain technology. One of these banks is Al Rajhi Bank, which is an important player in the Islamic financial market. This institution of Saudi Arabia will use blockchain technology to execute thousands of transactions a day.
On the question, the bank explained:
"Al Rajhi Bank is betting big on technology, and Blockchain is just an initiative that fits into our digital growth strategy, Al Rajhi has become global since its first success with the use of blockchain technology last year. "
The bank is currently working with Ripple and has been able to benefit from this partnership. Rao said that DLT offers a more collaborative and democratic platform that is able to reduce costs and can extend the reach of financial services to those not bound.
The Middle East region can embrace blockchain technology and help the entire financial sector of the region. According to the first Bank of Abu Dhabi, remittance expenses in 2016 managed $ 100 billion. Using Ripple technology, banks could make payments faster and also reduce the costs associated with traditional transactions. In addition, Ripple can also work to improve banking experience in Islamic countries. Blockchain technology can solve the problem of fakes fatwa and other Sharia certificates.
Distributed accounting technology helps traditional financial institutions reduce their costs and improve their services. The same will be able to do with Islamic financial institutions in the Middle East and other regions of the world.