On Thursday (26 January 2023), Jeremy Hogan, a partner at the American law firm Hogan & Hogan, who has been closely following and commenting on the U.S. SEC’s lawsuit against Ripple, explained how the XRP Ledger (XRPL) could work with central bank digital currencies (CBDCs).
The XRP Ledger was created in 2012 by David Schwartz, Jed McCaleb, and Arthur Britto, and XRP is the native currency of the XRP Ledger.
Binance Academy, which was officially launched on 11 December 2018, is the educational arm of Binance. On August 24, Binance Academy released a video about XRP — titled “What Is XRP Ledger (XRPL)?｜ Explained for Beginners” — on its YouTube channel .
Here are a few things that this video points out about XRPL and XRP:
- “XRPL is a decentralised public blockchain built with the purpose to enable a world where tokenized value is exchanged as quickly as information. The XRPL is stable, scalable, fast, and energy-efficient. It has continuously confirmed transactions since its deployment in 2012 while supporting more than 1500 transactions per second and transaction speeds of three to five seconds.“
- “Transactions are cheap. The average transaction cost on the XRPL is less than a fraction of a penny.“
- “The XRPL is friendly to our planet. It is the first major blockchain to be certifiably carbon-neutral.“
- “The network uses a federated consensus protocol to confirm transactions in which designated independent servers known as validators must come to an agreement on the order and outcome of XRP transactions. All verified transactions are processed without a single point of failure as no single participant can decide which transactions take priority.“
- “The cryptocurrency native to the XRP Ledger is XRP, a neutral bridge asset that is optimised for payments anywhere. With billions of XRP traded daily, XRP functions as a medium of exchange to facilitate cross-border payments quickly, cheaply, and sustainably. It can also be used to transact on XRP Ledger’s decentralised exchange (DEX) or engage with tokenized assets.“
- “The main applications of the XRP Ledger are payments. Using the XRP Ledger, assets can be moved across the world, enabling near instant money transfers for remittances, treasury payments, payrolls, and other cross-border payments.“
On 11 February 2022, the Digital Euro Association (DEA) announced that it was “delighted” about a new partnership with FinTech firm Ripple.
The Digital Euro Association (DEA) is “a think tank specializing in central bank digital currencies (CBDCs), stablecoins, crypto assets, and other forms of digital money.” Its mission is “to contribute to the public and political discourse through research, education, and by providing a platform and community for policy-makers, technologists, and economists to discuss digital money-related topics.” It’s “committed to independence and excellence, aiming to set the agenda and to shape policy by encouraging new ideas and forward-thinking in the field of digital money.”
In a blog post published on that day, the DEA started by talking about Ripple’s experience with ce tral bank digital currencies (CBDCs):
“Ripple, one of the leading providers of enterprise blockchain and crypto solutions for cross-border payments, has recently developed a blockchain-based infrastructure to support CBDCs and is engaged with Bhutan’s central bank, amongst others, to help execute their CBDC pilot. Ripple is also a member of the Digital Pound Foundation and continues to extend its efforts around CBDCs worldwide.“
Last September, former Goldman Sachs executive Raoul Pal explained why he is bullish on Ripple and the XRPL Ledger (XRPL).
Prior to founding macro economic and investment strategy research service Global Macro Investor (GMI) in 2005, Pal co-managed the GLG Global Macro Fund in London for global asset management firm GLG Partners (which is now called “Man GLG”). Before that, Pal worked at Goldman Sachs, where he co-managed the European hedge fund sales business in Equities and Equity Derivatives. Currently, he is the CEO of finance and business video channel Real Vision, which he co-founded in 2014.
On 9 September 2023, Pal held an Ask Me Anything (AMA) session on the “Real Vision Crypt”o YouTube channel.
According to a report by The Daily Hodl, this is what the Real Vision CEO had to say about Ripple and the XRP Ledger:
“There’s this weird narrative from the past about Ripple. The point being is, even if they have to settle a lawsuit and get a slap on the wrist, Ripple plays actually quite an important role. It’s a money transmission network and it does quite a good job of it. It has deep connections with global governments around the world and has worked really hard on it.
“So there’s a reason the chain is valued as highly as it is, and it’s not from speculation because actually it got taken off a whole bunch of exchanges because of the lawsuit. It’s actually because when I use my Metcalfe’s Law model, the amount of value that gets transacted on the chain is very high. It’s being used...
“So I think if you lift the legal issue, the probability is that the value of the chain increases significantly and as the world moves towards central bank digital currencies, I think the XRP Network is going to be somewhere at the center of all of that… I know it’s not the flavor of the day for a lot of people but I think it’s a big player, it’s a real player and a real niche.“
Anyway, yesterday, U.S. lawyer Jeremy Hogan wrote about how “the XRP Ledger could interact with CBDCs.”
Hogan told his over 251K Twitter followers:
“One possibility is that a CBDC could be issued on top of the XRPL as an IOU represented by a specific token. This would allow for the CBDC to take advantage of the XRP Ledger’s fast/efficient settlement times.
“Another possibility is that the CBDC’s Central Bank could open a “gateway” on the XRPL that allows users to deposit and withdraw the CBDC. This would allow for the CBDC to be used in conjunction with XRP and other digital assets on the XRP Ledger.
“It’s also possible that CBDCs will be pegged to XRP and interact with the XRP Ledger as a stable coin, which would allow for fast, cheap and efficient cross-border transactions.“
Featured Image via Pixabay