Speculations that XRP would serve as a bridge between CBDCs have surfaced.
In an interview with Forkast News, Ripple’s executive shared the company’s latest interaction with global regulators to discuss crypto and digital assets. One of the key focus areas is the exploration of CBDCs.
Brooks Entwistle, Managing Director and Senior Vice President of APAC and MENA for Ripple Labs, underlined the importance of crypto use cases in business and life.
The industry needs to prove its real-world utility. Entwistle shed light on the role of CBDCs:
“CBDCs, we do believe, are one of the most important and certainly strongest cases for utility going around.”
XRP Makes Sense for CBDCs
Entwistle also noted that global regulators have developed a particular interest in CBDCs. Over 200 countries and lots of central banks have joined the journey, carrying out their own needs.
According to Entwistle, Ripple has been already in discussion with over 20 central banks to assist their CBDC journeys. The outreach is not limited to vanguards like China but also spread to emerging countries with fewer resources like Bhutan or Palau.
Ripple announced in September 2021 that it had worked with Bhutan’s central bank, the Royal Monetary Authority (RMA), to integrate Ripple’s CBDC technology into the bank’s CBDC pilot.
The move is driven by the country’s aspirations to promote digital and cross-border payments, improve financial inclusion, and enhance its commitment to sustainability.
Ripple’s CBDC initiative intends to create collaboration in Palau and Bhutan, as well as ongoing dialogues around the world.
Why is Ripple Being Sued?
As a solution provider, Ripple has constantly expanded its presence in CBDC projects around the world but the U.S. remains a challenging target.
Entwistle said that the economic powerhouse was not a welcoming place for the industry at that time. This fact could lay an impact on the “innovation front” in the long run.
Regulators in the UK, Singapore, Switzerland, and Tokyo, on the other hand, are more open to discussing how the industry is headed.
Ripple hired most of its 300 new workers last year and does most of its operations outside the US due to regulatory challenges in the U.S.
When asked about the fierce competition in cross-border payments, Entwistle said that cross-border value flows are one of the biggest unsolved problems in world finance.
To do this, you need a global network. Ripple has come up with a solution called RippleNet, which is now used in more than 70 countries.
Global regulators are worried that the fast growth of cryptocurrencies will put investors and the monetary system at risk if they aren’t controlled well. This problem means that countries need to take effective steps to improve the way they regulate cryptocurrencies.
Ripple has said in the past that central banks could theoretically use some existing blockchains for their CBDC projects, but that most blockchains wouldn’t be able to provide instant settlement.
The banks can’t handle the increasing number of transactions at the speed they need to.
Also, most blockchains are public ledgers that can be used by anyone and are updated by a number of different validators, which is not at all good for CBDCs.
The company wants to provide central banks with their own version of blockchain that focuses on CBDCs and is safe, controlled, and flexible for issuing and managing CBDCs.
Not only is it fast and scalable, but it can also work with other crypto assets and the global financial infrastructure that is already in place.
The news came ahead of the final legal battle between Ripple and SEC. The ongoing case has drawn the attention of banks. The fate of XRP is uncertain, but the tech is sound.
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Nicholas Say