- Bank of France openly considers XRP Ledger as a platform for Europe’s Central Bank Digital Currency (CBDC).
- Despite legal battles in the U.S., XRP sees growth in liquidity and is attracting attention from global central banks.
In the escalating race to launch Central Bank Digital Currencies (CBDCs), the Banque de France has evidently set its eyes on Ripple‘s XRP, bypassing more mainstream choices like Bitcoin and Ethereum. This intriguing pivot, outlined in a recent CPA Australia report, illustrates how Ripple and its native currency, XRP, have started to garner attention from apex financial institutions across the globe.
CBDCs & XRP: A Match in the Making?
The CPA Australia report is explicit in citing Ripple and XRP’s efficacious architecture as a viable platform for CBDC issuance and management. It highlights not only the Banque de France but also other major central banks, such as the Reserve Bank of Australia, the European Central Bank (ECB), and the People’s Bank of China (PBOC), as showing interest in XRP. These institutions appreciate Ripple’s technological framework, which allows for the creation of new currencies and gives developers control over supply timing and quantity—features resonating well with current central bank functionalities.
Ripple itself has not been idle, recently revealing that it’s testing a private iteration of the XRP Ledger specifically designed to aid global central banks in CBDC management. The firm confidently proclaimed that the debut of the world’s first CBDC is only a matter of time. The ledger’s technical characteristics appear to align smoothly with the strategic requirements of CBDCs, offering operational efficiencies and supply control mechanisms akin to what central banks already employ.
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Global Growth Amid Regulatory Hurdles
Remarkably, XRP’s appeal to central financial institutions comes amidst ongoing litigation with the U.S. Securities and Exchange Commission (SEC). Despite the cloud of legal uncertainty stateside, Ripple CEO Brad Garlinghouse reports burgeoning XRP liquidity outside the U.S., particularly in Asia. This growth is significant, given that XRP’s value took a nosedive following the SEC lawsuit but has since rebounded, appreciating over 100% since the beginning of 2021. Presently, XRP boasts a market capitalization exceeding $21 billion.
The Banque de France’s apparent openness to XRP as a CBDC platform sets an important precedent, indicating a potential shift in how central banks view blockchain technology and digital currencies. It also underscores the juxtaposition of XRP’s flourishing international profile against its regulatory tribulations in the United States, painting a complex but riveting picture of its evolving role in the digital currency landscape.
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