According to Brad Garlinghouse, CEO of Ripple, XRP could serve its purpose in the best way when the central banks will roll out their respective central bank digital currencies.
It is the need of the hour that central banks across the world will have to onboard themselves over digital evolution, which is happening right now. While sharing his ideas in an interview with the podcast, known as The Scoop, he said the central banks began launching their own digital currencies keeping in mind the liquidation factor, which is very crucial for both banks and users. He then argues that the relationship or compatibility between different state digital currencies is very important and a challenge for the governments.
The Bridge between Two CBDCs
Garlinghouse says the company is working over making XRP a bridge between different central bank digital currencies and to make it a common cryptocurrency for cross-border transactions. “The point is to enable a lot of efficiency and liquidity between XRP and the US dollar, and XRP and the Australian dollar. So just using stablecoins doesn’t really solve the problem that XRP is solving,” he added.
The race towards the launching of central bank digital currencies is continued among the central banks of different countries. According to a report, more than 70% of central banks are making significant efforts in the launch of a state-based digital currency. Some governments are at the final stages of the development of a digital version of fiat currency. For instance, the government of China has launched various pilot programs to roll out digital yuan for the public.
Ripple is also looking for other efficient ways that could make cross-border transactions seamless, faster, and transparent. “We will certainly enter other vertical markets and we won’t just be a cross-border payments solution,” he stated.
Blockchain technology is the only solution that can make transactions more improved by removing friction in the whole process. On the cross-border transactions system, Ripple has partnered with more than 300 banks across the world.