90% of Central Banks, according to Ripple, are currently actively creating their own CBDCs. The company thinks XRPLedger can provide Central Banks special advantages given how quickly the CBDC narrative is developing.
The fact that the majority of Central Banks worldwide are collaborating with companies like Ripple to launch their own Central Bank Digital Currency is no longer news (CBDC). While the International Monetary Fund (IMF) once stated that over 110 Central Banks were at various stages of CBDC development, blockchain payments company Ripple Labs Inc. recently revealed that about 90% of Central Banks are actively involved in floating the digital version of the currency in its report titled CBDCs: The Future of Fiat.
CBDCs are not a new invention, but they have been the subject of much media attention since China decided to move forward with the widespread retail testing of its Digital Yuan around 2020. One of the factors cited by Ripple as to why many of these Central Banks are adopting CBDC is the improvement of payment system efficiency.
Cash payments are progressively becoming obsolete in many industrialized nations of the world as digital payment methods take center stage. The shortcomings of digital payment, such as their high cost and sluggish transaction speed, were made clear with the introduction of blockchain technology.
Blockchain-based payments can take just a few seconds or, at most, a few minutes, as opposed to the days it traditionally takes to make a transfer from one country to another. Due to this clear benefit, many users have adopted the technology, endangering legal tender in several nations. A CBDC will enable the nation’s payment system to keep up with current global trends.
According to Ripple, the introduction of new use cases will help reshape the role of the financial institutions functioning in the nation as a whole, and the CBDCs will also increase national competitiveness.
Discover the key stats to understand why financial institutions are optimistic about CBDC technology and its potential impacts on business, finance and society. https://t.co/M89c1lgNrh
— Ripple (@Ripple) January 12, 2023
Enhancing national competitiveness, increasing payment system efficiencies and fostering innovation while developing new use cases are among the groundbreaking benefits #CBDCs will bring to financial institutions. 🌟
— Ripple (@Ripple) January 12, 2023
What Role Ripple Plays in the CBDC Narrative
In the blockchain payments ecosystem, Ripple has emerged into a dominating leader. Over time, it has created a dynamic and user-friendly solution based on the XRPLedger that allows Central Banks to establish their own CBDCs.
The company claims that their CBDC platform promotes resilience, stability, and security. It boasts that by utilizing the XRP Ledger’s tested technology, Central Banks can establish confidence while enabling uniform standards, privacy, and security. Additionally, CBDCs will be able to build on the XRPLedger to provide wholesale retail goods that will be useful to banks, fintechs, and the general public. Only insights, no spam or falsehoods. You are always free to unsubscribe.
Other noteworthy advantages of the XRPLedger for CBDC development include overlay services, interoperability, and contributing to sustainability thanks to its energy-efficient protocol.
Ripple has signed strategic collaborations with various Central Banks of countries, like that of Bhutan, to develop its digital Ngultrum. Ripple has highlighted the ease with which its platform can support CBDCs and Stablecoins. The business now faces competition from companies like Mastercard and Visa, both of whom are developing products that can aid Central Banks in their individual CBDC development paths.
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