The World Economic Forum (WEF) has published a report in which the native cryptocurrency of the Ripple platform is recognized as the most suitable for the Central banks digital currencies (CBDC).
The WEF is a well-known influential organization, the “world government”, best known as the organizer of the annual meetings in Davos, Switzerland. The 50th such meeting took place this year. Leading businessmen and statesmen are gathering in Davos to discuss the most pressing problems facing humanity. This year’s Davos meeting took place in January to discuss environmental issues, income inequality and digital transformation. Meanwhile, no direct attention was paid to cryptocurrencies, but it was noted that digital transformation is dramatically changing society and the economy. In Davos, no concrete decisions are made, but global trends are determined. The CBDC Special Report highlights one of such trend. According to the WEF, there is a race of central banks in the CBDC sphere. Despite the fact that CBDC is not a cryptocurrency, in its development it solves many of the problems inherent in cryptocurrencies.
CBDC is the digital version of the sovereign currency issued by the country’s financial authorities. It is centralized and reflects the obligations of the country’s government. The WEF report clearly separates CBDC from cryptocurrencies and stablecoins. But at the same time, it indicates that XRP is the most relevant means of payment for intrabank and interbank settlements.
From its side, Ripple made an explanation of how central banks of countries can use XRP to create their digital currencies. Ripple notes:
– RippleNet’s On-Demand Liquidity service allows financial institutions to transact in real-time across multiple global markets using the digital asset XRP.
Ripple’s ODL service also can support direct transactions in digital currency of central banks. In this case, Ripple states that XRP is faster, significantly cheaper and a better scalable asset than any other digital asset. This makes XRP-token the best or even ideal tool for connecting different sovereign digital currencies.
Central bank digital currencies are being developed to address perennial global financial problems, such as the stability of payment systems and financial inclusion. Ripple has also been making efforts for many years to get the platform legalized in the US and other developed countries. So far, the most ambitious Ripple solutions have been implemented in Latin America and Australia.