Blockchain-based payments and remittance firm Ripple has launched its Central Bank Digital Currency (CBDC) Platform, allowing central banks and financial institutions to issue digital currencies. The move comes as more and more countries join the race to develop their virtual currency.
Ripple’s CBDC Platform to Simplify the Process of Issuing Digital Currencies
In a Thursday press release, Ripple said its CBDC platform provides an end-to-end solution for central banks, financial institutions, and governments to create digital currencies. The technology used in the platform is the same blockchain technology that powers the XRP Ledger (XRPL).
The platform will allow central banks to manage and customize the entire life cycle of their digital currencies, from minting to distribution to redemption and destruction, all in a highly secure manner. Furthermore, it offers end-users e-wallets that will enable secure transactions.
The technology used in Ripple’s CBDC Platform is built on a new private ledger underpinned by the XRPL’s core energy-efficient technology. The company said this energy efficiency would help reduce cross-border payment-related carbon footprints, a challenge among some digital currencies.
For financial institutions that hold significant amounts of digital currency, the platform also offers management and participation in inter-institutional settlement and distribution functions. James Wallis, Ripple’s VP of Central Bank Engagements and CBDCs, said the platform would help central banks develop a technology strategy for CBDC Implementations. He added:
“The innovative capabilities of the platform will help enable instant settlement of both domestic and cross-border payments, reduce risk, and improve the user experience of quickly sending and receiving digital currency on either side of a transaction.”
More than 90% of Countries Are Exploring a CBDC
CBDCs have gained momentum as a digital alternative to traditional fiat currencies or cryptocurrencies. Many central banks are considering launching their digital currencies to modernize the economy and provide better financial services to their citizens.
According to data by CBDC Tracker, 114 countries, representing over 95 percent of global GDP, are currently exploring a CBDC. Furthermore, more than 10 nations have launched pilot programs for CBDCs, with countries like the Bahamas, Cambodia, China, and Nigeria having operational CBDCs.
China has been one of the most significant players in the CBDC space, leading the pack with the launch of its digital yuan. The use of the digital yuan, also known as e-CNY, has found some adoption in 13 major Chinese cities, with other provinces launching initiatives to promote the use of the digital yuan.
For instance, the coastal province of Jiangsu has promised to launch a platform allowing citizens to pay education fees using the country’s CBDC. In another stance, Jiangmen, in Guangdong Province, Southern China, has said its whole bus network will incorporate digital yuan payments.
In the Bahamas, tourists can experience an extensively digitized economy powered by the Sand Dollar. Launched in October 2020, the Sand Dollar has since been implemented to make financial transactions easier for the Bahamian people, especially those located in remote areas.
Seven banks back Cambodia’s project Bakong. Launched in 2020, Bakong is recognized as one of the world’s first CBDCs and has roughly 270,000 users as of November 2022. According to the National Bank of Cambodia, the currency has reached about 7.9 million people, nearly half the country’s population of 16.7 million.
Ripple-SEC Case Still in Progress
The Ripple-SEC case is one of the most closely watched legal battles in the cryptocurrency industry. The Securities and Exchange Commission (SEC) has accused Ripple Labs of selling unregistered securities in the form of XRP cryptocurrency, a claim Ripple refutes.
The case is important because it has been regarded as a precedent-setting case that could significantly affect how other cryptocurrencies are regulated in the US. The case has been ongoing since late 2020, and while there have been some notable developments, it is still far from resolved.
Earlier this week, a federal judge denied a motion from the SEC to seal records of its internal deliberations following a speech by former director William Hinman. The ruling has been seen as a win for Ripple and the crypto community, as the Hinman Speech documents can help influence the court decision regarding which cryptocurrencies are securities.
This article originally appeared on The Tokenist
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