In “The Future of CDBCs,” Ripple new whitepaper, the company said that XRP could bridge the gap between various central bank digital currencies (CBDCs)in a cost-effective, frictionless, fast and efficient manner.
Ripple Promoting Its Ledger Via Its New Whitepaper
Earlier this month, Ripple had announced it is planning to launch a new version of the XRP ledger that is customized for central banks. The main aim of this new whitepaper appears to promote this XRP ledger. Ripple is advising central banks to adopt a private ledger that already exists instead of attempting to build a new ledger altogether. This would afford the central banks functionalities and flexibility associated with a decentralized ledger while maintaining a central control of economic management and money policies.
Opportunities And Threats
Some of the benefits associated with CBDC, according to Ripple, are: financial inclusion, aiding healthy competition and innovation. Control of monetary policies is another strong benefit of a CBDC.
One of the major challenges plaguing the CBDCs is interoperability. While each CBDC would strive to create its own policies and laws that would fit its own local market, they should also have common protocols that will make them work efficiently with digital assets and other CBDCs.
Recently, Jerome Powell, Chair of the U.S. Federal Reserve, stated that cash and digital currencies can co-exist. He said CBDCs are a better option to fiat for transactions given the fact that they are traceable. His previous economic projections caused a spike in the stock market and a hike in BTC price.