- Ripple is confident that its XRP Ledger is capable enough to handle stablecoins and CBDCs for billions of people across the world.
- Ripple said that central banks will have to strike a key balance between centralization on one hand and innovation on the other.
San Francisco-based blockchain startup Ripple has already been an active player in the FinTech space over the last few years. However, the company is stepping up its efforts to cater to the trillion-dollar market of central bank digital currencies (CBDCs).
As we know, central banks across the world have already started experimenting with CBDCs. This includes some of the top economies like the European Union, China, India, Australia, and others. On the other hand, the United States has been a bit slow and is evaluating the financial as well as legally liabilities of having a Digital Dollar.
Blockchain startup Ripple has released its own CBDC whitepaper offering a complete framework for implementing CBDCs. It also provides detailed guidance for ensuring the global interoperability of different CBDCs.
Ripple is seeking to grab a pie of this trillion-dollar industry that is evolving very fast. In a tweet, the blockchain startup noted:
By 2024, at least 50% of the world’s population is expected to use digital wallets for transactions, valued at over $9 trillion annually. 🌎
Our whitepaper explores how Central Banks can utilize #CBDC’s to take advantage of this growth. https://t.co/ewnfvOenrD
— Ripple (@Ripple) November 26, 2022
Our recent report shows how Ripple’s XRPL Ledger is capable enough to handle stablecoins and CBDCs for billions of people across the world. It provides key features like security, reliability, sustainability, and interoperability that are crucial to the entire ecosystem.
One major hurdle for Ripple is currently the existing case with the SEC. Ripple CEO Brad Garlinghouse said that Band of America is looking to partner with Ripple and will be using their ODL products. Similarly, Australia’s biggest financial conglomerate CommBank is looking to implement Ripple’s XRP Standard for domestic and global transactions.
Balancing Between Control and Innovation
However, the blockchain startup has been facing some criticism since many crypto enthusiasts believe that CBDCs will give central banks greater control over users’ money. In its whitepaper, Ripple noted that central banks must balance the desire for transformation with the need to maintain stability on a global scale.
Ripple said that central banks will have to strike a good balance between centralization on one hand and innovation on the other. The blockchain startup added:
If Central Banks do not enable the broad access, enhanced native functionality and interoperability that will allow their currencies to be adaptive and scalable, they risk losing control of the infrastructure for global digitized services.
Ripple added that central banks will also need to offer the non-bank partners greater access to core payments systems and infrastructure than they currently offer. For faster cross-border transactions, “It’s critical that Central Banks start working together to resolve these issues now, rather than leaving a bigger problem to fix further down the line,” added Ripple.