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Having already tackled cross-border transfers with its blockchain technology, Ripple plans to make its mark on dozens of digital currency projects by finding a way for them to work with each other.
To this end, Ripple recently released its CBDC Platform, which enables central banks, governments and financial institutions to issue their own central bank digital currency and stablecoin.
Ripple It uses distributed ledger technology that supports the XRP token to enable global payments for e-commerce. This new initiative will attempt to replicate that success for CBCCs and StatCoins, placing Ripple alongside US card networks in the race to interconnect various digital assets.
The CBCC platform is designed to solve digital currency usage issues for consumers and banks on private or public ledgers. The platform includes accounting technology; Redemption and distribution, redemption and liquidation capabilities and settlement and support for digital wallets. CBCC platform capabilities are primarily designed to meet the needs of regulated institutions such as commercial and central banks.
“As more and more central banks explore CBDC or stablecoin development, we understand the key use cases for wholesale and retail CBDCs,” said Joe Volono, director of business development at Ripple. Bulk CBCCs are designed for large entities such as banks that move large sums across borders. Wholesale CBCCs are considered simpler than retail CBCCs, which are designed for consumers.
The CBCC platform was released following Ripple’s acquisition. MetacoA Swiss-based cryptocurrency holding company for $250 million. That deal gives Ripple the ability to store, extract and manage Metaco’s various tokenized assets, while Metaco’s technology reaches more users. Ripple is working on CBCC pilots with several regions, including MontenegroEuropean Union, Palau and Bhutan and others.
“It is the core technology behind expanding financial inclusion, modernizing monetary policy, improving payment security and increasing cross-border payment efficiency,” Volono said.
Ripple’s years of experience will inform how cross-border CBCC payment systems work with central bank partners to enable cross-border payments through its RippleNet product, Vollono explained. Ripple’s blockchain technology attracts countless businesses and other entities that trade globally by enabling transactions to take place without relying on correspondent banks for foreign exchange and other processing steps.
RippleNet’s enterprise blockchain product is available in more than 70 countries, and is based on ISO 20022 messaging standards designed to facilitate global digital payments.
“RippleNet has evolved into a cross-border payment platform with crypto-native services such as instant settlement, line of credit and instant payment services,” Volono said. “The CBCC platform is a continuation of this.”
When there are many CBDC projects Whether in progress or under international consideration, these projects are often found with most of the current transactions taking place across borders. According to Pavlov Sidelov, founder and chief technology officer at SDK.finance, there are no established legal or standardized mechanisms for exchanging CBDCs between countries or central banks.
“In other words, there is no official framework to regulate cross-border transactions involving CBDCs,” said Sidelov, adding that the use of CBDCs in everyday consumer transactions or the retail sector is still in its early stages and considered experimental.
Interoperability is a work in progress for stablecoins, which are a type of cryptocurrency that aims to address market volatility by backing stablecoins with traditional currencies. According to Aviva Litan, vice president and analyst at Gartner, there are many stable coins in circulation right now.
“Stablecoins backed by traditional currencies already exist and exist today,” Litan said. “So why not just use stablecoins backed by currencies?”
Lithan said she is more optimistic about the technology underpinning CBDCs than actual digital currencies.
“It’s getting easier for people to push the blockchain use case. And new protocols like LayerZero make it easier to move from one blockchain to another,” Litan said. Layer zero A protocol that supports the exchange of messages between different distributed ledgers or blockchains, making it easier to perform cross-chain transactions.
There are discussions and projects aimed at creating a global CBDC market, including the use cases for retail CBDCs, Sidelov said.
The concept of Visa’s universal payment channel, for example, is significant given the current lack of mechanisms for the global exchange of CBDCs, Sidelov said.
Visa UPC It is a network of blockchain networks designed to enable digital currency payments both on and off the Visa network. Both Visa and MasterCard Networks and scale of card companies are approaching governments on how they can contribute to global CBCC projects. Visa recently announced that it will work together Central Bank of Brazil To enable the use of CBDCs to expand investment sources for the country’s small farms.
“By providing a secure and seamless means of transferring digital funds, UPC acts as a ‘universal adapter’ between different blockchains, facilitating the exchange of value for central banks, businesses and consumers, regardless of the specifics of the currency involved, potentially solving the issue of cross-chain connectivity.” Apparently,” Sidelov said.
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