San Francisco-based blockchain payments firm Ripple has introduced a platform for governments, central banks, and financial institutions to create their own digital currency. Described as “a frictionless end-to-end solution”, the new platform is based on Ripple’s XRP Ledger and is an improved version of Ripple’s Private Ledger.
Ripple has also joined forces with the Hong Kong Monetary Authority, which acts as the defacto central bank, for the launch of the digital Hong Kong dollar (e-HKD) pilot program.
What Is The Point Of Ripple’s New CBDC Platform?
CBDCs are a hot topic right now. Unlike crypto assets like Bitcoin or Ethereum, CBDCs are controlled and managed by a centralized entity. Per the Atlantic Council’s tracker, only 11 nations have rolled out a central bank digital currency so far, but many other countries are researching and testing the technology.
Ripple has waded further into the CBDC game via the launch of a new platform for creating blockchain-based digital currencies. The Ripple platform allows for the oversight and customization of the entire life cycle of the CBDC, including minting, distribution, redemption, and removal from circulation. The CBDC platform will also let institutions operate and conduct inter-institutional settlement and distribution functions.
Ripple will leverage the power of blockchain technology used for the XRP Ledger and provide a way for government institutions to increase financial inclusion and reduce the risk involved in domestic and cross-border payments.
President of the Republic of Palau, Surangel Whipps Jr, hailed Ripple’s new CBDC platform while describing how it’s enabling them to create their own solutions.
“Partnering with Ripple to help create our national digital currency is part of our commitment to lead in financial innovation and technologies, which will provide the citizens of Palau with greater financial access”.
It will be possible for financial institutions to use the platform to oversee the distribution processes involving their digital currency, while end users — both corporate and retail — will be able to hold their CBDC securely and use them to pay and receive payment for goods and services, similar to how banking apps function today. This entails the convenience of offline transactions and as well as accommodating non-smartphone cases.
Ripple is also collaborating with Taiwan’s Fubon Bank to develop a real estate asset tokenization and equity release product using a retail version of the e-HKD CBDC.
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