The U.S. Federal Reserve has found itself at the center of the ongoing discussion about central bank digital currencies (CBDCs) as it considers incorporating XRP, the native cryptocurrency of the XRP Ledger (XRPL), into the CBDC framework. The Federal Reserve sought input from industry experts and the public through a questionnaire to gather insights on the potential role of XRP in revolutionizing instant settlements in the digital payments landscape.
The questionnaire released by the Federal Reserve consisted of 22 questions aimed at exploring various aspects of CBDC adoption, including risks, benefits, privacy concerns, and technological considerations. The goal was to gather diverse perspectives to inform the design and implementation of a U.S. CBDC. Notable recommendations received included the importance of regulatory clarity and collaboration with the digital currency industry, as well as the significance of offline capabilities for CBDCs.
One recommendation highlighted the need for instant settlement and zero fees in a user-friendly CBDC, endorsing the use of XRPL for its proven track record in facilitating rapid and low-cost transactions. Additionally, XRP’s ability to offer near-instantaneous settlements has attracted attention as a potential game-changer for the digital payments landscape.
Furthermore, XRP’s role as a bridge currency for cross-border transactions was emphasized, with proponents arguing that XRP’s liquidity and scalability make it a reliable solution for facilitating large-value cross-border payments, negating the need for a CBDC.
The recommendations also included a proposal for the creation of a sidechain using a public chain like XRPL, enabling seamless interaction between the Federal Reserve’s money and private sector innovation, fostering collaboration and driving further advancements in the digital payments landscape. Additionally, XRP was touted as the ultimate solution for achieving transferability across multiple payment platforms, solidifying its position in the CBDC discourse.
In the 584-page document summarizing the opinions on the potential implementation of a U.S. CBDC, XRP was mentioned 111 times, underscoring its growing influence in shaping the future of CBDCs. The Federal Reserve’s CBDC questionnaire and the influx of recommendations have highlighted the pivotal role of XRP in the instant settlements ecosystem.