March 4, 2021 - With more and more central banks showing interest in Central Bank Digital Currencies (CBDCs), Ripple has announced a private version of its public open-source XRP Ledger. According to an official announcement by Ripple, the upcoming CBDC Private Ledger platform would be based on the same blockchain technology used for Ripple's public XRP Ledger (XRPL).
"… the CBDC Private Ledger is designed for issuing currencies, with over 5,400 currencies issued on the XRPL over the past 8 years, including its native digital asset XRP — which can be leveraged as a neutral bridge asset for frictionless value movement between CBDCs and other currencies", read the official statement.
As per the company's report, more than 80% of Central Banks are actively exploring some sort of sovereign-backed cryptocurrency.
"Each new CBDC will have unique goals driven by the specific market challenges and opportunities of its country, unavoidably leading to different technologies and implementations — leaving the world with an array of CBDC solutions".
Most existing blockchains are public ledgers visible to all network participants and updated by a broad network of validators. According to Ripple, "A Central Bank requires more transaction privacy and control over its currency than a public ledger can offer, so will most likely opt to create a CBDC on a private ledger that can also operate at the required scale".
Ripple's plans are that money moving on the CBDC Private Ledger would be cost-effective, reliable, and close to instantaneous. Transactions can also happen at volumes required by Central Banks. The CBDC Private Ledger would also be capable of handling tens of thousands of transactions per second (TPS) initially, with the potential to scale to hundreds of thousands TPSs over time.
"Transactions on the CBDC Private Ledger are verified by the same consensus protocol used by the XRP Ledger, which is far less energy intensive, and therefore less expensive and 61,000 times more efficient than public blockchains that leverage proof-of-work.…We are currently engaged with Central Banks around the world to better understand their goals and assess how the CBDC Private Ledger can help achieve them", reads the publication.
Aside from recent blockchain-related projects, Ripple has experienced some existential turmoil at the end of 2020 and the beginning of 2021. In December 2020, the US Security and Exchange Commission filed an action against Ripple Labs Inc. and two of its executives and significant security holders. The accusations allege that Ripple had raised more than $1.3 billion through an unregistered, ongoing digital asset securities offering. This has resulted in a massive survival battle for Ripple's native token, XRP, with the cryptocurrency being delisted from numerous cryptocurrency exchanges.
Ripple contends that as a cryptocurrency, XRP falls outside of the SEC's jurisdiction. Ripple's lawyers have responded stating that, "This case represents regulatory overreach, plain and simple."
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