FinTech firm Ripple says that it is \u201cpiloting\u201d a private version of the open-source public XRP Ledger (XRPL) to allow central banks to create and manage their own digital currencies.<\/p>\n
The XRP Ledger was created in 2012 by David Schwartz, Jed McCaleb, and Arthur Britto, and XRP is the native currency of the XRP Ledger.<\/p>\n
In a blog post published yesterday (March 3), Ripple said that more than 80% of the world\u2019s central banks are \u201cactively exploring some form of sovereign-backed cryptocurrency\u201d, and that eventually there would be a wide range of central bank digitial currencies (CBDCs). <\/p>\n
Ripple says that existing public blockchains cannot meed the needs of CBDCs since \u201ca Central Bank requires more transaction privacy and control over its currency than a public ledger can offer,\u201d which means that it is \u201cmost likely opt to create a CBDC on a private ledger that can also operate at the required scale.\u201d<\/p>\n
Also, it says that interoperability is crucial:<\/p>\n
\u201cAdditionally,\u00a0interoperability\u00a0\u2013 the ability for a private ledger to connect with today\u2019s existing global financial infrastructure, as well as other CBDCs and other digital currencies\u2013 will be critical. In fact, in its\u00a02021\/22 innovation program, the Bank for International Settlements identified interoperability for cross-border payments as a major priority for CBDCs.<\/em>\u201c<\/p>\n Ripple\u2019s proposed solution to this problem is the CBDC Private Ledger, which uses the same distributed ledger technology as the XRP Ledger, which means that it is \u201cbuilt for payments\u201d and \u201cdesigned for issuing currencies\u201d; XRP could then serve as \u201ca neutral bridge asset for frictionless value movement between CBDCs and other currencies.\u201d<\/p>\n Ripple says that that transactions on the CBDC Private Ledger will be low-cost, reliable, and fast; initially, it will handle tens of thousands of transactions per second (TPS) \u201d with the potential to scale to hundreds of thousands TPSs over time.\u201d<\/p>\n Ripple is \u201ccurrently engaged with Central Banks around the world to better understand their goals and assess how the CBDC Private Ledger can help achieve them.\u00a0\u201c<\/p>\n XRPL co-creator and Ripple CTO David Schwartz says:<\/p>\n \u201cThe XRPL has been running smoothly for 8+ years w\/ billions of $ at stake. The CBDC Private Ledger ensures transaction privacy and security controls combined w\/ the reliability and payments proficiency of the XRPL \u2013 the best of both worlds.<\/em>\u201c<\/p>\n Monica Long, General Manager of RippleX, \u201cRipple\u2019s initiative to create an open developer platform for money\u201d, says:<\/p>\n \u201cTokenization has always been a key feature of the XRPL with over 5400+ issued tokens since inception. CBDCs will live on new private ledgers that run parallel to XRPL, using XRP as a bridge to interoperate w\/ other currencies. No more walled gardens!<\/em>\u201c<\/p>\n Yesterday, Matt Hamilton, Director of Developer Relations at RippleX, clarified a couple of things for membersof the XRP community:<\/p>\n