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

Digital Assets

Bybit under pressure from Ontario regulator after being forced out of the UK

Bybit has recently been forced to close its operations in the United Kingdom following the ban on Crypto CFD products earlier this year. 

Digital Assets

‘Rat Poison’: XRP, BTC, ETH, ADA, DOGE rebound despite JP Morgan survey

Interestingly enough, when asked about their personal investments, 40% of them were actively trading cryptocurrencies.

Industry News

FTX and MLB partner together for brand awareness and innovation

FTX, one of the largest crypto exchanges in the world that has been on an expansion spree, has announced that it has tied up with Major League Baseball (MLB) in the US for brand awareness.

Digital Assets

Polygon (MATIC) and Aave grant recipient tie up to incentivise new users with rewards

Polygon (MATIC), a Layer 2 solution on Ethereum, has tied up with Aave grant recipient RabbitHole to incentivise new users for making deposits into Polygon.

Digital Assets

John McAfee, software pioneer and a big crypto supporter, dies in Spanish jail

John McAfee, the founder of the anti-virus software which was a household name a couple of decades back and a huge crypto enthusiast, has died in a Spanish jail on the same day that a court allowed him to be extradited to the US.

Industry News

TraderEvolution Global partners with TradingView: Brokers to enjoy direct access

The multi-asset platform is now connected to TradingView’s network of venues, liquidity pools, and asset classes 

Digital Assets

Visa and Paypal invest heavily into $300 million blockchain fund

Visa and Paypal, behemoths that have been known supporters of the blockchain domain, have invested in Fund V of Blockchain Capital.

Opinion

FX Trading is a business: If you want results, act like a professional. Go Prime of Prime!

Trading the markets is a business. It is no wonder that the ones that see it as gambling are willing to trade against the house, but retail traders that want results, they must act like professionals.

Digital Assets

Celsius acquires MVP workshop as it looks to build more on crypto

Celsius, one of the largest cryptocurrency lending and rewards earning platforms, has announced that it has acquired the development division of MVP Workshop as it looks to expand its development team.