The World Economic Forum (WEF) is looking at Ripple’s native currency, XRP, as the most relevant cryptocurrency in the emerging central bank digital currency (CBDC) space.
In a report published early this year, the WEF says that central banks and government agencies are looking at the potential of CBDCs to solve perennial global financial issues such as financial inclusion and the stability of payment systems. The Geneva-based international organization also made a clear distinction between CBDCs and cryptocurrencies.
“CBDC is a digitized version of sovereign currency, created and issued by, and a liability of, the country’s monetary authority. CBDC differs from other forms of digital or virtual currencies, including cryptocurrencies such as Bitcoin and ‘stablecoins,’ which are not issued by central banks or typically considered legal tender.”
Although the WEF is drawing a clear line between the two forms digital assets, it names XRP as the most relevant cryptocurrency in the wholesale CBDC space for intra or inter-bank payments and settlements.
In a recent blog post, Ripple notes that central banks around the world are locked in an arms race to develop their own CBDCs. The payments startup also explains how central banks can leverage XRP to facilitate and support the use of CBDCs.
“RippleNet’s On-Demand Liquidity service allows financial institutions to transact in real-time across multiple global markets using the digital asset XRP and such a solution can also support the direct exchange of CBDCs. XRP is faster, less costly, and more scalable than any other digital asset, making it the ideal instrument in bridging two different currencies quickly and efficiently.”