Following the price hikes noted by the likes of Cardano, XRP has lost its position among the top 5 cryptocurrencies with respect to market capitalization. In fact, with a market cap of $24.33 billion at press time, the cryptocurrency was positioned seventh on CoinMarketCap’s charts. Despite such setbacks, however, Ripple has been marching along with innovative use cases in the market, with the XRP ledger being one of them.
In the past, Ripple executives have noted that the company has been holding discussions with many central banks to use XRP ledger as the basis for their National digital currencies or CBDCs [Central Bank Digital Currency]. According to James Wallis, Vice President of RippleX, Central Bank Engagements and CBDCs, at Ripple,
“We have a clear view that a private instance of an existing decentralized ledger is a good way to go. What I mean by that is, you take all the really robust experience of an open-source project, that has built a ledger that has been running for most of the years, like the XRP ledger, for example. Then you create a version that’s a bit more centrally controlled, a central bank can be comfortable with running.”
Wallis, who appeared on the Voice of FinTech podcast, noted that this is the first step and Ripple has been working on it diligently.
As mentioned, Ripple has had discussions with several central banks around the world to get CBDCs on the XRPL. If the company is able to convince central banks to launch CBDCs on the XRP ledger, it could provide a huge boost to the adoption of Ripple’s technology. At the time, Asheesh Birla, the General Manager of Ripple, had said,
“We are meeting and currently discussing strategy with various central banks around the world.”
Wallis also noted that apart from the ledger, Ripple is focused on interoperability and innovation, while offering its services to central banks. While the use of CBDCs can be for domestic and foreign purposes, a ledger will enable governments to open doors for cheaper and faster transactions using XRP as a neutral bridge asset. According to the exec, this would also allow innovation to be bolstered, pushing the payments infrastructure to the next level.
XRP has already been used as a mediating currency in cross-border payments solutions by Ripple. Now, if it moves on to become a natural asset for the world’s CBDCs to use, we may see its market grow even stronger.