Global payments company Ripple came up with a big announcement after months of tough for the company. Ripple announced that it is conducting tests of a special version of its XRP ledger for central banks.
Ripple, one of the biggest investors of XRP, stated in its March 3 share that more than 80 percent of central banks are conducting research on state-backed cryptocurrencies, so central bank digital currencies (CBDC) will enter our lives very soon.
“Ripple is testing a special version of its open source XRP ledger to offer central banks a secure, controlled and flexible solution for digital currency issuance and management.”
The company suggested that most CBDCs would be based on distributed ledger technology, just like cryptocurrencies, but that they would not be able to remove a possible CBDC as existing blockchain networks were not developed for payment purposes.
In addition, most blockchains consist of public ledgers and can be viewed by anyone. Central banks, on the other hand, can demand transaction confidentiality and control that open ledgers cannot offer, so they seem more likely to use a private ledger.
About: What is a central bank digital currency (CBDC)?
Developed by Ripple, the CBDC Private Ledger will be based on the same blockchain technology as the XRP ledger, meaning it will be built for payment purposes.
Stating that it has created more than 5,400 cryptocurrencies in the past 8 years in its XRP ledger, the company said that this means that CBDC Private Ledger was also designed to create a currency. Ripple has suggested that it will be possible to transfer money on CBDC Private Ledger in a cost-effective, reliable and almost instantaneous way. It has also been claimed that the ledger, which is said to be able to process tens of thousands of transactions per second, can scale up to hundreds of thousands of transactions per second.
Ripple was going through troubled days after the U.S. Securities and Exchange Commission (SEC) sued the company and its executives for unregistered securities sales in December 2020. SEC, which associates XRP with the company, considers cryptocurrency as a security.
Following the news of the lawsuit, XRP lost more than 50 percent of its value, and many exchanges suspended crypto-related transactions. Ripple executive Chris Larsen announced that he was preparing to reject the case filed by the SEC the other day.