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Ripple Plans to Leverage Payments Platforms and XRP Ledger for Delivery of Central Bank Digital Currencies

Ripple is actively planning on offering central banks a toolset that will enable them to implement various forms of central bank digital currencies (CBDCs), according to Ross Edwards, the company’s global head of client solutions.

In a recent Ripple presentation, Edwards highlights the company’s suite of cross-border payment products and enterprise solutions for financial institutions, and he says the company plans to take those developments into the public sector world.

“We’re able to further leverage this technology as infrastructure suited to the exploration, ideation and eventual delivery of a fully functional CBDC.”

The presentation shows that Ripple’s toolset, which includes the XRP Ledger, Interledger Protocol and PayID (now called Paystring), will enable a CBDC project to study technical, functional, and operational outcomes on platforms that are being used in live payments today.

Additionally, the toolset will encourage both private and public sector development of the CBDC ecosystem, according to the Ripple executive.



Edwards says Ripple plans to use an open-source platform that will “be added to and altered based on the specific requirements” of CBDCs and utilized to offer central banks multiple operational attributes like centralized vs. decentralized record-keeping, consensus algorithms, and accessibility/authorization choices. The toolset will also allow central banks to tweak economic and functionality options according to their own requirements.

“Other economic factors down to divisibility of the currency, inflation and interest-bearing aspects, to all those other monetary and fiscal policy impacts can be altered… The baseline functionality set can be added to, altered, or reduced based on the needs of a specific CBDC. New transaction types can be added. Logics such as smart contracts may be incorporated into the core platform as a specific requirement and incorporation of sovereign identity artifacts may be needed.”

A Ripple job advertisement last month indicated the San Francisco payments startup wanted to bring the XRP Ledger to the world of CBDCs. Ripple CEO Brad Garlinghouse also recently noted that central banks could consider using the XRPL to issue stablecoins.

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