A new report is published by Ripple that focuses on the opportunities and risks of CDBDs. The report points the last year’s opportunities and innovations in the cryptocurrency industry. Ripple predicts that evolution in the CBDCs worldwide will play a vital role in future innovations and progresses.
The Importance of Regulations and Interoperability
Central bank digital currencies (CBDC) were among the top news in 2020. After China talked about issuing one of them, many countries followed them by planning similar projects. Governments have acknowledged the power and importance of digital currencies and want to attract their citizens in the new world, too.
A central bank digital currency has many opportunities for a country’s citizens. More than anything, it helps the unbanked people access more comfortable payment solutions. But issuing a CBDC needs lots of work and development from multiple organizations. Regulators have hard jobs to do, too.
In Ripple’s latest report, which is more of market research and prediction, the cryptocurrency company focuses on the importance of interoperability and regulations for CBDCs. They think that multiple national currencies have to adopt a better interoperability system with new digital solutions. As a result, the walled financial gardens will be removes, and cross-country payments will be so much easier.
Ripple believes that multiple incidents in the world showed the urgent need for national digital currencies in the past year. Part of the post about the new report says:
“Existing conversations about CBDCs have taken on even greater urgency this past year for a number of reasons, including pandemic-related declines in cash usage, the need for more effective ways to distribute government aid to unbanked citizens, and the impending launch of China’s digital yuan.”
You can download Ripple’s latest report here. The paper talks about the challenges and potentials for CBDC in the new year. Besides, the company has some recommendations for government organizations regarding CBDC.
The essential recommendation from Ripple focuses on an international standard for multiple central bank digital currencies. They believe a common standard can help CBDCs become cross-country payment solutions. Something that has been done about the internet with worldwide protocols and standards.
Interoperability is the critical factor in the future of CBDCs, believes Ripple. They recommend that companies create interoperable central bank digital currencies so everyone can benefit from the new solutions. They talk about neutral bridge assets as useful solutions, too. In the end, the company introduces the RippleNet as an on-demand liquidity service that can help governments issue interoperable currencies easier.
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