Tuesday, November 24, 2020
Home Ethereum - Top 10 Ripple CEO: Interoperability is Pivotal in Deploying CBDCs Globally

Ripple CEO: Interoperability is Pivotal in Deploying CBDCs Globally

Quick take:

  • Ripple CEO, Brad Garlinghouse, has pointed out that interoperability between CBDCs will be pivotal to the digitization of fiat currencies
  • Without interoperability, they are building the same ‘siloed systems’ without communication bridges
  • RippleNet and XRP can bridge this gap of interoperability

The CEO of Ripple, Brad Garlinghouse, has stressed the need for interoperability in the development of the various Central Bank Digital Currencies being explored by the multiple global central banks. According to Mr. Garlinghouse, a lack of these CBDCs to operate seamlessly with each other would be making the same mistakes that have crippled the software industry where one system cannot freely communicate with another.

Mr. Garlinghouse shared his insights via twitter and was responding to a recently published article by the team at Ripple stressing the importance of interoperability in any payment system. Below is his Tweet urging interoperability between Central Bank Digital Currencies.

The Need for Frictionless Value Movement

One key takeaway from the article from Ripple stressing interoperability is that most central banks are focusing primarily on domestic use cases of CBDCs such as the distribution of stimulus checks to cushion citizens from the economic effects of COVID19. However, their focus should go beyond domestic use and factor in that we now live in an interconnected global economy.

Therefore, at the backbone of each CBDCs should be a provision for bridging with other payment systems including those of private stakeholders.

While focusing on domestic use cases is understandable for individual countries, we live in an increasingly interconnected global economy. It will be critical to bridge the gaps between the various CBDC initiatives with existing payment systems as well as other digital currencies to ensure they are successful on a global scale.

The key is that each system must contain core functionality that enables it to operate seamlessly with other payment systems. Ripple believes in leveraging open protocols and standards, developed in partnership with private stakeholders such as payment service providers, financial institutions and fintech companies, to achieve interoperability

RippleNet Can Be Used to Bridge that Gap

In terms of providing solutions for bridging the communication gaps between global CBDCs, the team at Ripple pointed out that RippleNet can provide a solution.

Ripple’s global payments network, RippleNet, is built on open, interoperable protocols designed to enable value transfer across multiple networks by defining how simple functions, provided by individual networks, should work together. Ensuring this level of interoperability creates a network-of-networks that significantly boosts the utility of each CBDC.

XRP Can Support the Exchange of CBDCs

Furthermore, XRP can be used to bridge two CBDCs in a matter of seconds and within RippleNet.

RippleNet’s On-Demand Liquidity service allows financial institutions to transact in real-time across multiple global markets using the digital asset XRP and such a solution can also support the 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.

Using a neutral and efficient digital asset like XRP also reduces the hegemonic influences of the most powerful nations and helps level the playing field in the international trade’s payment system.

Popular Articles

Coinbase, Citing Regulations, Ends Margin Trading Services

Coinbase Pro, a US exchange for professional cryptocurrency trading, will no longer offer margin trading. Citing guidance from the Commodity Futures Trading Commission (CFTC), the...

Nigeria is establishing a framework for widescale crypto adoption

Africa’s largest economy has become a bastion for...

Bitcoin Cash Price Prediction: BCH/USD Retreats after the Price touches $373 Resistance Level

BCH Price Prediction – November 24 BCH/USD is following bullish sentiment as the daily chart reveals while the sellers are waiting to scalp gains from...

Mike McGlone: Bitcoin Likely to Hit $170,000 In Two Years

Bloomberg’s Mike McGlone has emerged to mention that the price of bitcoin could potentially reach $170,000 come 2022. McGlone Is Always There When Bitcoin Spikes McGlone...

What would Commerce Secretary Andrew Yang mean for crypto?

President-elect Joe Biden is reportedly considering crypto-friendly Andrew Yang as his future Secretary of Commerce. According to a CNN report “based on conversations with Biden...

Coinbase Scraps Bitcoin Tax Form That Led Users to Overpay

In brief Coinbase is scrapping an old tax form. Its new form will go to anyone who made at least $600 from certain Coinbase products. The old...