TL;DR Breakdown
- Central Banks could leverage Ripple’s XRP ledger interoperability.
- CBDCs continue to gain worldwide acclaim.
- Ripple undeterred despite legal battle with U.S. SEC.
With the world edging closer to the creation and adoption of Central Bank’s Digital Currencies (CBDC), the Ripple team have announced that it is on course to introduce an XRP ledger that will support CBDC. This announcement is coming on the back of an ongoing legal battle between Ripple and the United States’ Securities and Exchange Commission (SEC).
Brad Garlinghouse, Ripple’s CEO, had previously stated last year that the interoperability feature of XRP puts the cryptocurrency at an advantage compared with developing CBDCs. He had said in his statement that the CBDCs wouldn’t be a threat to Ripple’s cross border payment system.
The Development of CBDCs
While several nations’ central banks have been making strides towards CBDCs, it appears that the People’s Bank of China (PBoC) currently leads the way. The PBoC digital Yuan has already entered its trial stages as the central bank continues to distribute it to different provinces, with the latest being Chengdu.
It has been suggested by many calling for worldwide crypto regulation that the introduction of these currencies will assist in this regulation. Thus, many central banks around the world continue to intensify their efforts towards CBDC actualization.
Ripples’ XRP Ledger and CBDCs
However, Ripple has raised concerns over the interoperability of these developing digital currencies. They have suggested the need for open bridges which would be available to optimize the digital assets as regards cost, speed and scalability.
Open bridges would help release capital and support value transfers between digital currencies of different nations, according to Ripple. As such, the crypto giants have proposed the XRP as ideal for bridging national digital currencies.
It is upon this information that Ripple seeks to introduce an XRP ledger fully focused on CBDC, in order to provide national central banks with a controlled, secure and flexible solution that will enable them to effectively issue and manage their digital currencies.
