- Ripple is confident that its XRP Ledger is powerful enough to handle stablecoins and CBDCs for billions of people around the world.
- Ripple said that central banks have to strike a fundamental balance between centralization on the one hand and innovation on the other.
San Francisco blockchain startup Ripple has already been an active player in the FinTech space for the past few years. However, the company is ramping up its efforts to tap into the trillion-dollar central bank digital currency (CBDC) market.
As we know, central banks around the world have already started experimenting with CBDC. This includes some major economies such as the European Union, China, India, Australia, and others. On the other hand, the United States has been a bit slower to consider the financial and legal responsibilities of having a Digital Dollar.
Blockchain startup Ripple has released its CBDC white paper that presents a complete framework for implementing CBDCs. It also provides detailed guidance for ensuring the global connectivity of various CBDCs.
Ripple is looking to capture a piece of this rapidly growing trillion dollar industry. 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, worth more than $9 trillion annually. 🌎
Our white paper explores how Central Banks can use it #CBDCs take advantage of this growth. https://t.co/ewnfvOenrD
– Ripple (@Ripple) November 26, 2022
Our recent report shows how Ripple’s XRPL Ledger is powerful enough to manage stablecoins and CBDCs for billions of people around the world. It provides key features such as security, reliability, durability, and compatibility that are important for the entire ecosystem.
One big obstacle for Ripple right now is the current case with the SEC. Ripple CEO Brad Garlinghouse said Band of America is looking to partner with Ripple and will use its ODL products. Similarly, Australia’s largest financial conglomerate CommBank is looking to implement Ripple’s XRP standard for domestic and global transactions.
The Balance Between Control and Innovation
However, the blockchain startup has faced some criticism as many crypto enthusiasts believe the CBDC will give central banks greater control over users’ money. In its white paper, 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 have to strike a good balance between centralization on the one hand and innovation on the other. Added the beginning of the block:
If Central Banks do not enable the broad access, advanced native functionality and interoperability that will allow their currencies to adapt and expand, they risk losing control of the infrastructure of global digitized services.
Ripple added that central banks will also need to provide non-bank partners with more than the basic payment systems and infrastructure they currently offer. For the aforementioned transactions, “It is very important that Central Banks start working together to solve these problems now, instead of leaving a bigger problem to happen further down the line,” added Ripple.