Company Ripple told about the jump for MENA in payments.
Company Ripple told about the jump for MENA in payments, tweeting:
MENA is using #fintech to streamline payment rails & encourage industry innovation. This, combined with rapid #CBDC exploration in the region, is priming MENA for a huge leap forward in payments. We outline the region’s adoption barriers + opportunities.
The material on the official website stated, in particular, the following:
The rise of fintech across the Middle East and North Africa (MENA) region is well underway. As the world increasingly trends toward green energy solutions and profits from oil exports decline, many MENA countries are looking to diversify their economies away from fossil fuels. Numerous countries have looked to fintech to bolster development from an industry standpoint and to drive greater financial access for their populations.
The high rates of mobile phone adoption and easy-to-use financial applications have enabled individuals in this region to send and receive mobile payments, which increase access to payment rails outside of traditional financial systems. But embracing central bank digital currencies (CBDCs) could enable even more significant financial inclusion. Designing and introducing blockchain-based CBDC solutions that can integrate with mobile apps can help the region leapfrog into the future of inclusive payment solutions.
BARRIERS + CHALLENGES TO SUCCESS
Uncertainty around implementation is a significant hurdle for CBDCs to succeed across MENA. For instance, would CBDCs be used for retail payments, wholesale payments, or both? How can implementation tackle the challenge of interoperability between one country to another? As there are myriad customization possibilities and real-world applications for CBDCs, the question of where and how to start can be daunting.
Another key concern centers around the role of financial intermediaries in the wider-scale adoption of CBDCs. Potential revenue gaps for traditional banks and payment service providers may be concerning and will need to be addressed. It will also take time and tact to gain public trust and increase knowledge of viable use cases for digital assets. Because CBDCs can be monitored, controlled and personalized as needed, rollout of these digital assets needs to be approached with delicacy and transparency to gain public trust.
OPPORTUNITIES + WHAT’S NEXT
A number of emerging economies—notably in sub-Saharan Africa—skipped landlines altogether and moved directly toward mobile phones to increase access to payment rails. Transforming the region’s economic trajectory in this way presents an opportunity for central banks across MENA to follow suit by being early adopters of CBDCs to leapfrog the transition to digital currency. The ability to interact with blockchain-based CBDCs through mobile devices—which is estimated to reach 80% of the population by 2025—would also help drive financial inclusion in rural and underserved areas across the region.
Ultimately, the introduction of CBDCs will be a defining moment in the history of money and will position first-movers as forward-facing fintech leaders. And the MENA region is particularly well-poised to be at the vanguard of this movement.
Ripple is a proud partner in many endeavors around emerging digital currencies. This includes being a member of the Digital Pound Foundation, as well as working with Bhutan around financial inclusion and sustainability in CBDCs and the Republic of Palau to develop a stablecoin strategy.