XRP Is a Bridge Currency for CBDCs, Ripple’s Whitepaper Says

XRP is a neutral bridge currency for CBDCs, according to the latest whitepaper released by Ripple. The San Francisco-based company has outlined the potential benefits of central bank digital currencies in its latest report.

Dubbed 'The Future of CBDCs', the report highlighted the growing need for an effective way for governments around the world to pay benefits or stimulus money directly to citizens, especially the unbanked. Ripple also mentioned the importance of neutral bridge currencies like XRP for CBDCs.

“A neutral bridge asset can support healthy, alternative Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term markets that will allow for frictionless and cost-effective value movement between various CBDCs in real-time. It would also enable the exchange of less liquid CBDC pairs and increase global competition by lowering entry barriers to new and smaller market participants. To enable a truly efficient global market, a bridge currency must be specifically optimized for Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and support the same speed, scalability, low cost and security that CBDCs will provide. One example of a neutral bridge is the digital asset XRP, which can be used to bridge two different currencies quickly and efficiently,” the report mentioned.

XRP is the 7th largest cryptocurrency in the world with a market cap of more than $23 billion. The digital currency is up more than 120% since the start of 2021.

XRP Ledger

Ripple announced earlier this month that the company is testing a private version of the XRP Ledger to support central banks in the issuance of central bank digital currencies (CBDCs). A recent report from CPA Australia mentioned that the central bank of France is actively considering XRP Ledger for the issuance of a central bank digital currency. Ripple has formed several partnerships in recent months, and the company is actively working with many financial companies worldwide.

XRP has erased all the losses since the SEC’s lawsuit against Ripple and its executives. The cryptocurrency jumped nearly 100% in February 2021 amid the Reddit frenzy.