Ripple has recently released a whitepaper on the future of CBDCs, according to which XRP is a neutral bridge currency for CBDCs. The firm based in San-Francisco has indicated the potential advantages of central bank digital currencies in its latest published report.
Ripple Whitepaper Says XRP Is a Bridge Currency for CBDCs
The report released by Ripple says that there is an increasing need for an effective way for governments around the world to pay benefits or stimulant money directly to the citizens.
Moreover, the firm mentions the significance of neutral bridge currencies such as XRP for CBDCs.
The details mentioned in the report goes as follows:
“A neutral bridge asset can support healthy, alternative liquidity markets that will allow for frictionless and cost-effective value movement between various CBDCs in real-time. It would also enable the exchange of less liquid CBDC pairs and increase global competition by lowering entry barriers to new and smaller market participants.”
In addition to this, the report mentions details regarding the scalability, low cost, speed, and security of a bridge currency, which reads:
“To enable a truly efficient global market, a bridge currency must be specifically optimized for payments and support the same speed, scalability, low cost, and security that CBDCs will provide. One example of a neutral bridge is the digital asset XRP, which can be used to bridge two different currencies quickly and efficiently.”
Private Version of XRP Ledger in Testing
As announced by Ripple earlier this month, a private version of XRP is in the testing phase to support the central banks in the publication of CBDCs.
Additionally, a recent report from CPA Australia revealed that the Central Bank of France is anticipatorily considering XRP Ledger for the issuance of a CBDC.
In past months, the firm has formed various partnerships and is anticipatingly functioning with major financial institutions worldwide.