The crypto asset could be used as a “neutral bridge” between different currencies, Ripple says.
Mar 23, 2021
Ripple Touts Role for XRP in Central Bank Digital Currency White Paper
Ripple has pitched the XRP (-1.02%) cryptocurrency to link different central bank digital currencies (CBDCs) in a new white paper.
- XRP, which is used in some of the company’s payment products and Ripple helps develop, could be a “neutral bridge” between different currencies, bringing speed and efficiency to the process, according to the document titled, “The Future of CBDCs.”
- The white paper, published this week, identifies cross-border payments with CBDCs as receiving little attention from central banks, which largely target domestic use cases.
- That is a “short-sighted” stance, according to Ripple, which says interoperable CBDCs could bring nations a competitive advantage, allowing commercial entities to make international trades.
- “Supporting immediate real-time foreign exchanges, as opposed to the current 3–5-day process will likely still require the need for prefunded currency accounts,” the paper states.
- A neutral bridge currency would then be needed to support liquidity markets to allow for effective movement of value between different CBDCs.
- Ripple looks to be pitching itself to central banks researching and developing CBDCs amid its ongoing lawsuit with the U.S. Securities and Exchanges Commission (SEC) over its allegedly illegal sales of XRP.