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- Ripple is working with nearly two dozen central banks to integrate their digital currencies on its CBDC platform, with Palau and Colombia among its confirmed partners.
- With interoperability, fast transactions, low fees and energy efficiency built into the system, Ripple’s CBDC platform is among the leading contenders for decentralised digital currencies.
CBDCs and tokenisation are the two blockchain use cases that every stakeholder has rallied behind, from crypto enthusiasts to global behemoths and regulators. Ripple is in prime position to become a global leader in both, with the XRP Ledger emerging as one of the best technologies to issue digital currencies and tokens.
On the CBDC front, most central banks are apprehensive about deploying their national currencies on decentralised infrastructure, and understandably so. Central banks are charged with monetary stability and underpinning the economies of millions of people and must be cautious about new technology.
However, as technology in this sector advances, more central banks are exploring DLT, and the XRP Ledger is among those catching the eye.
Ripple has hinted at working with around 20 central banks to explore deploying their CBDCs on its platform. So far, only four have confirmed this relationship—Palau, Colombia, Bhutan, Georgia and Montenegro.
While the developments in these countries are still in the early stages, it’s still a big deal. Take Colombia, for instance—the South American nation has the fourth-largest economy in the region, anchored on petroleum exports. According to the World Bank, Colombia’s GDP stands at $343 billion.
If the Banco de la República were to issue its CBDC on the XRP Ledger, the Ripple ecosystem would get a massive chunk of this massive economy on-chain. The Latin American country has over 51 million, all of whom would get the opportunity to use XRPL to make day-to-day payments.
CBDCs are XRP Ledger’s Best Shot at Mainstream Adoption
For the XRP ecosystem, CBDCs might be its best chance at mainstream adoption. XRPL has lagged behind its rivals, including Ethereum and Solana, on DeFi, DEXes and NFTs. It also has a smaller ecosystem of dApps and projects, such as meme coins, which have been instrumental to Solana’s recent growth. As Crypto News Flash reported, DeFi activity on XRPL decreased by 10% in Q1, while DEX volume dipped by 41%.
This makes CBDCs a lifeline for the XRP Ledger. With these digital currencies, XRPL can leap past Ethereum and Solana, whose ecosystems revolve around crypto use cases like DeFi, and go straight to the ordinary people who just want solutions to their challenges and don’t care about the technology behind them.
According to the Atlantic Council, over 134 countries, which account for 98% of the global economy, are exploring CBDCs. This makes it the best avenue to target the masses, and if XRPL can get ahead of its peers and become the main player, it could be the biggest tailwind for its XRP token.
XRP trades at $0.5174 and has barely moved over the past day.
