Ripple stuck with SEC as American Bankers go against CBDCs

Rick Steves

The ABA named no names but seems to be pointing fingers at the many distributed ledger technology firms that are offering their services to develop CBDCs.

The American Bankers Association has warned lawmakers about real-world trade-offs that could significantly reshape the banking system in a world of CBDCs.

The defensive stance comes in a year that already saw the Eastern Caribbean going live with its own CBDC. and many countries have announced development programs for their sovereign digital currencies. Last week, Brazil announced the guidelines for the potential development of a CBDC after launching a working group in 2020.

Today, El Salvador approved Bitcoin as legal tender. Although not a CBDC, this move is certainly a revolutionary one. And if the ABA is worried about CBDC’s risks to consumers and financial system, approving Bitcoin as legal tender is probably troublesome for the association, especially if other countries follow El Salvador’s lead.

In a statement for the record of a Senate Banking subcommittee hearing, the banking trade body said that choosing between the various CBDC designs requires “serious and complex policy tradeoffs” and that too often CBDC proponents take a “highlight reel” approach to describing CBDC, “cherry-picking all the perceived benefits, while downplaying the serious risks to consumers and our financial system.”

The ABA named no names but seems to be pointing fingers at the many distributed ledger technology firms that are offering their services to develop CBDCs. These include R3’s Corda, Ethereum, Stellar, Hedera, eftpos, and Ripple’s private version of the XRP Ledger.

“Given the additional complexity, delay, and transition costs involved in creating a new form of money, there are strong efficiency interests that suggest CBDC should only be pursued as a final option to meet clearly-defined public policy goals that cannot be achieved through payments innovations that leverage existing digital dollars.

“As of today, those use cases have not emerged. If a viable use case for CBDC in the United States does emerge in the future, design choices must be carefully considered to ensure that the benefits, as well as the risks of introducing a CBDC, are fully appreciated”, the association stated.

While the ABA sees no viable use case for a digital dollar, the European Central Bank is pursuing a digital euro within the next five years. ECB’s Panetta has proposed a plan that limits each citizen’s wallet to €3,000.

One of the strongest contestants for the development of the digital euro is Ripple, which seems to be a favorite in the eyes of France.

The whole world is watching what the United States will do regarding a digital dollar. In May, Federal Reserve Chairman Jerome Powell spoke about the central bank’s work:

“The effective functioning of our economy requires that people have faith and confidence not only in the dollar, but also in the payment networks, banks, and other payment service providers that allow money to flow on a daily basis.

“Our focus is on ensuring a safe and efficient payment system that provides broad benefits to American households and businesses while also embracing innovation”, he stated, adding that the Fed plans to unveil protypes by July.

Ripple Labs is most probably looking to strike a deal with the Fed to use XRP in the system. The firm, however, is somewhat stuck in a lawsuit with the SEC, which may be hampering the firm’s panache among central banks.

And although Brad Garlinghouse’s company keeps on signing new clients, its competitors are gaining ground. This week, a group of banks have started testing a new FX swaps platform developed by Finteum and powered by R3 and Fnality – aka “XRP Killer”.

The SEC and Ripple may soon reach a settlement deal, which should allow the firm going forward with its IPO plans. The regulator, however, seems to be using tactics to stall the case, including not handing over internal documents regarding cryptocurrencies BTC, ETH, and Ripple’s XRP. Should the SEC remain uncooperative, the Judge may order monetary sanctions.

FinanceFeeds has recently covered attorney Jeremy Hogan’s view of what the settlement would look like. One of the terms could bottleneck the flow of XRP.

 

Read this next

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

Fintech, Uncategorized

BitMEX integrates HALO from Solidus Labs for cross-market surveillance

“The recent approval of the Spot Bitcoin ETF has piqued the market’s interest. As a result of price volatility, the trading volumes for crypto derivatives have gone up substantially. HALO, with its advanced technology and crypto-native detection architecture, will enable BitMEX to smoothly and safely scale trade surveillance across its increased trading volumes and provide the necessary safeguards for new product launches.”

Reviews

IUX Broker Review

IUX, recently rebranded from IUX Markets, stands as a multi-asset Forex broker recognized for its regulatory compliance across various jurisdictions.

Industry News

Horizon Software rebrands to Horizon Trading Solutions

“Horizon Trading Solutions has seen accelerated global growth over the past year to meet the rising demand for our trading solutions and built-for-purpose technology offering. The choice to rebrand represents a key part of this development, while maintaining our heritage and history in the industry.”

Market News

USDJPY has surged to levels last witnessed in 2022. Should we consider opening a short position?

The recent resurgence of the US dollar has propelled USD/JPY to new heights, touching levels not seen since 2022. This surge comes against the backdrop of stable short-term yields and ongoing economic data that fails to signal a significant slowdown, prompting questions about the extent of current monetary easing measures.

Digital Assets

DED Trends on Twitter After Memecoin Snapshot Announcement

Polkadot-backed community coin #DED, made it to the trending charts on X, demonstrating community’s engagement and interest behind the memecoin. 

Digital Assets

BlockDAG Presale Nears $10 Million Amid Toncoin’s Momentum, Green Bitcoin’s Presale, and the Rise of Other Top Cryptos

This article will examine three top trending topics: Toncoin’s potential, Green Bitcoin’s innovative presale, and BlockDAG’s sustainable mining approach. These cryptocurrencies take centre stage for their uniqueness and innovation.

<