National Bank of Abu Dhabi has partnered with blockchain technology solutions provider Ripple to launch what it claims to be a first-of-its-kind platform in the Middle East.

National Bank of Abu Dhabi has rolled out a platform that uses blockchain technology to facilitate cross-border payments, claiming to be the first bank in the Middle East to do so.

Blockchain technology, a virtual distributed ledger of transactions shared peer-to-peer, can record ownership across a public network of computers rendered tamper-proof by advanced cryptography. It is already known as the platform for the controversial digital currency bitcoin. The nascent technology is causing a stir within the financial services sector as its supporters believe it could reduce hidden expenses in the financial system by ousting inefficiencies across areas such as payments, syndicated loans and equity clearing. 

The new channel looks to provide regional customers with a simple, real-time and secure way of processing their cross-border payments within NBAD's network, the bank said in a statement. 

The bank partnered with Ripple, a blockchain technology firm that offers settlement solutions to financial institutions, to create a hybrid infrastructure that married NBAD's existing payments framework with Ripple's blockchain-based solution. 

“Integrated to the NBAD’s innovative payments infrastructure, the Ripple solution offers customers end-to-end visibility of transactions and allow for the instant transfer of funds to a beneficiary in a cost-effective manner,” NBAD said. 

Using Ripple's technology, NBAD said it aims to “significantly progress” the way in which cross-border payments are carried out by offering clear costs, improved delivery time and increased transaction transparency, ultimately reducing the investment and resources required by customers to send payments.

“Blockchain technology transforms and paves a new way in achieving our goals and better serve our customers, adding value through accessibility and transparency. As an initial adopter and first bank to go live on Ripple, NBAD offers innovative solutions to our clients' payments needs,” said Ramana Kumar, managing director and head of product management at NBAD.

According to the 2016 World Bank Migration and Remittances Factbook, the United Arab Emirates is the fourth-top remittance-sending country in the world, accounting for more than $19 billion.