Ripple fintech decacorn has published a report on the evolution of CBDCs (Central Bank Digital Currencies), believing that XRP can provide support to these bank-issued stablecoins to serve as a bridge currency for them.
Weiss Ratings agency has meanwhile reminded the community that the regulators now allow banks to use stablecoins, implying that this is the future of digital currency.
"CBDCs will be important for transforming payments globally"
In its article, Ripple emphasized its vision of CBDCs playing a vital role in transactional payments in the future, believing 2021 to be a key year for this to come true.
In 2020, stablecoins were on a tear due to the global pandemic, the growing need for cashless payments and even the distribution of stimulus funds to U.S. citizens.
China launched its own digital stablecoin, DCEP, last year. It has been issued by the Central Bank and is being actively tested now.
Neutral bridge asset required: XRP
Ripple believes that, in order to make the most of CBDCs, the majority of the world's central banks (around 80 percent) need to interact on this important issue and use open standards and neutral bridge assets for high speed, low transaction fees and scalability.
Neutral bridge assets will allow for frictionless value movement between various CBDCs without requiring each one to solve the liquidity challenges inherent in cross-border transactions.
Here the blockchain giant Ripple reminds its readers of its On-Demand Liquidity system that can use XRP for real-time transactions as a bridge currency. The article calls XRP an ideal tool for bridging two different currencies more efficiently and better than other coins would be able to.
XRP can also offer direct support for direct exchange of CBDCs.
XRP is faster, less costly and more scalable than any other digital asset, making it the ideal instrument in bridging two different currencies quickly and efficiently. This solution can also support the direct exchange of CBDCs.
Largest U.S. banking regulator "blesses" stablecoin use
On Jan. 4, the Office of the Comptroller of the Currency, with Coinbase's former high profile executive as its leader, issued permission to banks to participate in node verification networks and use USD-pegged stablecoins for payments.
The community's reaction to this statement varied. If some saw it as a major step towards crypto legalization, like Anthony Pompliano, and Circle CEO (USDC stablecoin creator) Jeremy Alliare, others took it as a threat to civil liberties—such as Twitter and Square CEO Jack Dorsey.
Weiss Ratings analytics agency's response was also positive, as it tweeted that the regulator has basically stated that stablecoins are the future of payments.