When we first heard about the potential for a central bank digital currency everyone thought that this new “coin” would be the Ripple XRP killer. The ones who have actually done their research and understood what RippleNet should be capable of did not see it that way. The people who took the time and put the effort in to learn about Ripple and RippleNet knew the end goal: Central Bank Digital currencies would be moved across the XRPL and XRP would be the bridge asset. Central Banks want to have control of their CBDC, and they certainly would not want to hold another bank’s CBDC as they would not have any control over it. The FUD ran wild for quite some time, as we heard more and more news in the background about central banks currencies coming out and this would deem XRP useless. Boy, were they wrong.
The goal at the end of the day was simple to the ones who are educated. The XRPL would bridge all currencies this included central bank digital currencies. It would look something like this:
Central Bank Currency A (USA) ———–XRPL ———– Central Bank Currency B (France)
February 2nd 2020 the Central Bank Of France published a document titled “CENTRAL BANK DIGITAL CURRENCY”
Potential circulation of the wholesale CBDC on several blockchains. Oversight by the central bank
of this circulation would be complex and could have implications for financial stability (4.3.2) and
monetary policy transmission (4.2.3) that are difficult to anticipate at this stage. Two different
approaches could be taken to address this question:
The central bank puts itself in a position to issue wholesale CBDC units on any blockchain that
can be used as a medium of exchange at its counters. This solution would be extremely
complex to manage and would result in the central bank having to organise circulation of the
wholesale CBDC on blockchains whose technology and governance framework are out of its
Units issued on the wholesale CBDC’s native blockchain could be transferred to other
blockchains. Since the attributes of a unit of the wholesale CBDC (file representing the
currency unit, keys enabling use) may be integrated in a cryptoasset circulating on another
blockchain, which is possible on Ethereum and Ripple, for example, it would then become
possible to use the unit on this blockchain. At this point, from the central bank’s perspective,
the unit would be “immobile” (no movement would be recorded in the distributed ledger)
until one of the users of the wholesale CBDC’s original blockchain made it circulate. In the
intervening period, the wholesale CBDC unit could be exchanged via the secondary
blockchain between entities not belonging to the digital currency’s formal circulation
network. However, during circulation on secondary blockchains, entities exchanging these
assets would not in principle be able to check their authenticity, integrity and uniqueness.
As we examine bullet A, the central bank talks about issuing their own block chain and CBDC. They then go on to speak on how it would be extremely difficult and complex to manage this. They also spoke about governance and how it would be out of there control. This method is out of the question as it would just cause more work and confusion. The easiest way to go about issuing a CBDC is covered in the 2nd bullet.
When we examine bullet B, we clearly see how RippleNet plays a major role into their solution for use a CBDC. By using RippleNet the central bank would still have control over their own currency, and they would be able to exchange their currency for another currency that was accepted on the block chain.
Central Bank Digital currencies are coming to life this year, and there is only 1 effective way to bridge all these different currencies and that is via RippleNet. There is a reason Ripple is working with 40-50 central banks around the world.
#Ripple mentioned by France’s Central Bank
“Attributes of a unit of the #CBDC may be integrated in a #Crypto Asset circulating on another#Blockchain, which is possible on #Ethereum & @Ripple, it would then be possible to use the unit on this #Blockchain“https://t.co/fJ2Yvr7tvt pic.twitter.com/nkdjL9E0iM
— XRPcryptowolf (@XRPcryptowolf) February 10, 2020