Ripple to pilot private version of XRP Ledger for CBDCs
California fintech company Ripple announced the pilot testing of a private version of the public XRP Ledger intended for launching central-bank digital currencies (CBDCs).
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Ripple is piloting a private version of the open-source, public #XRPL that allows Central Banks to create and manage a digital currency—enabling global interoperability. Get involved today. https://t.co/fLRSdejGI8
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— Ripple (@Ripple) March 3, 2021
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According to the press release, more than 80% of central banks are actively exploring some form of CBDC. The company intends to provide institutions with \”a secure, controlled and flexible solution for issuing and managing digital currencies\”.
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Ripple contends that distributed ledger technology will underpin most CBDCs. For a rapid rollout of central-bank digital currencies, they say, authorities could deploy existing blockchains. Yet public ledgers are unlikely to be suitable for this purpose:
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- Most are not designed for payments and would be unable to support the transaction volumes required for a retail CBDC;
- Central-bank digital currencies would require greater privacy of transactions than they can offer.
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The company says CBDC Private Ledger will provide \”cost-effective, reliable, virtually instantaneous\” transactions in volumes required by central banks. Throughput is claimed to be in the tens of thousands [simple_tooltip content=’transactions per second’]TPS[/simple_tooltip] at the initial stage.
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In addition to leveraging the XRP Ledger, the firm’s solution supports the RippleNet network and the Interledger protocols to deliver \”very high throughput for use cases such as micropayments\”.
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Back in November last year, Ripple took a step toward collaborating with central banks on issuing CBDCs by hiring a liaison specialist.
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In January, the company said it was in negotiations with central banks about using the XRP Ledger as the basis for their digital currencies.
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