- The International Monetary Fund (IMF) is developing a global platform for Central Bank Digital Currencies (CBDCs) to facilitate international transactions.
- Ripple has surfaced as a potential solution in an IMF report from March 2023, hinting at its potential role in the future of digital currency exchange.
Following the announcement by the International Monetary Fund (IMF) that it is orchestrating a digital Central Bank Digital Currency (CBDC) platform, Ripple has surfaced as a possible game-changer. This revelation stems from a March 2023 IMF report, uncovered by Ripple’s community of supporters, known as the ‘XRP Army’. It’s worth noting that the relationship between Ripple Labs and the IMF extends back several years.
The planned CBDC platform aims to streamline transactions between nations. IMF Managing Director Kristalina Georgieva articulated on Monday,
“We need systems that connect countries for more efficient and fair transactions. At the IMF, we’re developing a concept for a global CBDC platform.”
Georgieva emphasized the necessity of a shared regulatory framework for digital currencies to enable global interoperability. Without such a platform, she warns, cryptocurrencies may fill the resulting void.
The IMF Director cited the fast-paced rollout of CBDCs worldwide. As it stands, 114 central banks are investigating and experimenting with CBDCs, with around 10 already launching their own digital currencies.
The IMF report titled
“Trust Bridges and Money Flows: A Digital Marketplace to Improve Cross-Border Payments”,
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highlights Ripple and XRP as potential resources for enhancing cross-border monetary exchanges. The report lays out a blueprint for a global marketplace for tokenized money exchange, with the aim to encourage discussion and scrutiny.
Three potential models for such a marketplace were outlined: a private settlement asset like Ripple’s XRP, an open-source marketplace like Stellar Foundation or DeFi networks, and a marketplace based on unbacked crypto assets, like Strike that utilizes Bitcoin and the Lightning Network.
The report authors lean towards the public solution, akin to Ripple’s, as it offers distinct advantages. These include solving centralization-related coordination issues, providing transparent governance and operational stability, and ensuring full compatibility with financial integrity standards.
Ripple’s relationship with the IMF goes back to 2018, with Ripple’s Executive Chairman, Chris Larsen, featuring in the High Level Advisory Group on Fintech. Moreover, Ripple’s presence at various IMF conferences over the years, as revealed by the ‘XRP Army’, further substantiates this association.
Despite these developments, the price of XRP maintains its lower range, as it faced rejection at the $0.4964 resistance.
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