France eyes Ripple’s CBDC ledger for digital euro

Rick Steves

The CBDC Private Ledger is built for payments and issuing currencies. Ripple’s native digital asset XRP can be leveraged as a neutral bridge asset for frictionless value movement between CBDCs and other currencies.

Ripple has announced it is piloting a private version of the XRP Ledger.

According to the firm’s blog, the plan is to provide a distributed ledger offering to central banks who wish to develop, issue, and manage their own sovereign-backed cryptocurrencies.

Ripple claims its CBDC Private Ledger, which is based on the same blockchain technology that powers the XRP Ledger (XRPL), is able to satisfy the needs of governments and economies with a secure, controlled, and flexible solution.

Over 80% of Central Banks are actively studying the development of their own digital currencies and Ripple claims its CBDC ledger is both private (for transaction privacy and control over the currency) and interoperable (to connect with today’s existing global financial infrastructure, as well as other CBDCs and other digital currencies), as well as customizable.

The CBDC Private Ledger is built for payments and issuing currencies. Ripple’s native digital asset XRP can be leveraged as a neutral bridge asset for frictionless value movement between CBDCs and other currencies. It can handle tens of thousands of transactions per second (TPS) initially with the potential to scale to hundreds of thousands TPSs over time.

Digital euro on the XRP ledger?

CPA Australia has released a report on CBDC which stated that France’s central bank, Banque de France, has openly discussed Ripple/XRP as a possible platform for Europe’s central digital currency.

According to the document, “Ripple and XRP enjoy the trust of many banks as a model for CBDCs because it is highly centralized and is based on a permissioned network where only certain network nodes can validate transactions, as opposed to decentralized and permissionless Bitcoin and Ether. Ripple also allows the creation of new currencies and Ripple developers can decide the timing and quantity of supply in a similar way to current central bank operations.”

Talk of creating a digital euro has been going on for years ever since Bitcoin gave rise to the digital asset ecosystem, which is currently valued at around $1.3 trillion.

In February, ECB’s Panetta warned that if innovations in central bank money are not well designed, they can become a source of financial disruption. He pointed to paper banknotes as an example of innovation, which made commerce more straightforward.

“But their success did not come easily. Attempts by central banks to issue banknotes in the 17th century resulted in too many being issued and even defaults, raising questions about their effects on stability and, ultimately, on the credibility of the sovereign. Yet modern banknotes eventually enhanced the benefits of central banking for society at large.”

Digitalization generates greater efficiency and lower costs, but it may also pose risks for consumers and the financial sector. As tech giants take over financial intermediation, there is a risk of personal information being misused as well as risk of big tech companies threatening competition through tying, bundling, cross-subsidization and winner-takes-all dynamics.

The ECB is concerned with the risk of tech giants crowding out traditional intermediaries and reduce competition in financial markets, limiting consumer choice. As big tech technologies are governed elsewhere, European sovereignty is at stake. Stable coins used by these companies could create systemic risks and endanger monetary sovereignty.

In order to preserve money as a public good, central banks must go digital. The digital euro would increase consumer choice, reduce transaction costs and support the digitalization of the economy, according to Mr. Panetta.

Is Amazon developing a digital currency in secret?

Amazon may very well be planning to launch a digital currency of its own. The project hasn’t been announced yet, but recent job posts may hint that way.

A job announcement for a Software Development Manager – Digital and Emerging Payments, found by Coindesk, states the company intends to “launch a new payment product starting with Mexico as our initial launch country. This product will enable customers to convert their cash into digital currency using which customers can enjoy online services including shopping for goods and/or services like Prime Video.”

Facebook was the first big tech company to announce a cryptocurrency project: Libra. In December 2020, it was rebranded as Diem.

The 27-strong Libra Association planned to launch digital versions of several currencies, plus a “digital composite” of all of its coins, in order to address backlash from regulators over its initial plan to create one synthetic coin backed by a basket of currencies.

Now, the plan is to launch a single coin backed one-for-one by the dollar – a stablecoin. Diem is not meant to rely on cryptocurrency mining. Only members of the Diem Association will be able to process transactions via the permissioned blockchain.

The Diem Association officially plans to transition to a permissionless proof-of-stake system within five years, but according to their own materials, no solution exists “that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network.”

 

Read this next

Institutional FX

Deutsche Bank goes live with its FX pricing and trade engine in Singapore

Deutsche Bank has gone live with its electronic foreign exchange pricing and trading engine in Singapore, where demand for currency trading among institutional players is on the rise.

Retail FX

CySEC extends the suspension of Depaho license until November 19

The Cyprus Securities and Exchange Commission (CySEC) has decided to extend further the suspension of the license of the Cyprus investment company Depaho Ltd, which operates the retail FX brands GTCM, FXGM and TRADEAPP.

Retail FX

CAPEX.com introduces QuantX, a tool to build automated portfolio

Multi-licensed broker CAPEX.com has rolled out a new portfolio platform, QuantX, which uses a client’s risk tolerance assessment and other criteria to create fully customized investment portfolios.

Digital Assets

Ripple scores major win: Judge orders SEC to explain…a lot

The SEC is ordered to explain, among other things, how the Howie test applies to XRP, what is the status of Ether and Bitcoin, and the sale of XRP as investment contracts.

Retail FX

Trade CFDs on 900+ of the Biggest Companies this Earnings Season with HotForex

Traders with the internationally acclaimed multi-asset broker HotForex can trade CFDs on the stocks of over 900 companies during Earnings Season with tight spreads, flexible leverage, negative balance protection and the many other advantages that have made it an honest, open and transparent broker of choice to over 2.5 million traders around the world.  

Digital Assets

Polygon (MATIC) double spend bug yields $2 million bounty for developer

Polygon, the Layer 2 solution on top of Ethereum, has recently paid out the highest ever bug bounty in history to a whitehat developer Gerhard Wagner for pointing out a double-spend bug in the network which could have resulted in huge losses if it had been exploited.

Digital Assets

KuCoin aims to become largest social trading platform in crypto

KuCoin was founded in September 2017 and it currently provides Spot trading, Margin trading, P2P fiat trading, Futures trading, Staking, and Lending to its 8 million users in 207 countries.

Digital Assets

Apifiny’s crypto trading network adds Instant Transfers for best bid and offer

Instant transfers significantly enhance Apifiny Connect, allowing traders to more efficiently buy and sell on 25 connected markets across six continents.

Retail FX

iFOREX clients can follow two experts trading in real time

Trading Rooms’ access will be free of charge for active traders who open an account with the broker.

<