Ripple to Provide Blockchain Support for Central Banks Issuing CBDCs

Friday 05 March 2021, 10:00 AM AEST - 1 month ago

Ripple is moving forward with a new private version of its XRP ledger to provide support for Central Banks issuing CBDCs (Central Bank Digital Currency). The new ledger will be based on the same blockchain that powers XRP.

80% of Banks Seeking Blockchain Technology

While the battle with the Securities and Exchange Command (SEC) continues, Ripple will conduct a pilot of this new private network to provide Central Banks with effective and flexible solutions for the issuance and management of their digital currencies.

The company stated that as cryptocurrencies move forward into the mainstream and more institutions are digital assets, over 80% of Central Banks are desperate to issue their own CBDCs.

This also means that more banks are considering using blockchain technology for their ecosystem, thus moving on and embracing the advantages (and challenges) of digital assets.

Hundreds of Thousands of TPS for Banks

This new private ledger will be tested to handle tens of thousands of TPS (Transactions per Second), and eliminating the tedious delay usually inherent to wire transfers. The network is expected to potentially scale to hundreds of thousands of TPS in the future —while maintaining speed and low fees. Some key features that the ledger will provide are:

  • 61,000 times more efficiency compared to PoW (Proof-of-work) blockchains.
  • Same protocol verification system used by the XRP ledger.
  • Less energy-intensive
  • High scalability, up to tens of thousands of CBDC transactions and possibly hundreds of thousands in the future. 

A New Network For Banks

Ripple is also exploring a new way to bring institutions into a more DeFi (Decentralised Finance)-style ecosystem. The company is planning to bring together all CBDC ledgers into a single network, enabling interoperability with full technological and financial independence.

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