Banque de France Explores XRP for Central Bank Digital Currency (CBDC)

Banque de France considers Ripple’s XRP for Central Bank Digital Currency (CBDC) development.
Ripple’s technology and XRP’s features make it an attractive choice for central banks worldwide.

In the race to develop Central Bank Digital Currencies (CBDCs), Banque de France has made an unexpected choice by considering Ripple’s XRP as a potential platform. This decision, highlighted in a CPA Australia report, signifies a significant shift in preference toward Ripple and XRP by apex financial institutions.

The CPA Australia report explicitly mentions Ripple and XRP’s robust architecture as a promising foundation for CBDC issuance and management. Beyond Banque de France, central banks like the Reserve Bank of Australia, the European Central Bank (ECB), and the People’s Bank of China (PBOC) have also shown interest in XRP. They recognize Ripple’s technological framework, which not only allows the creation of new currencies but also provides developers with control over supply timing and quantity—features in alignment with the functionalities of central banks.

Ripple has actively contributed to this prospect by revealing its testing of a private version of the XRP Ledger, tailored to assist global central banks in managing CBDCs. The company confidently asserts that the world’s first CBDC is on the horizon. The technical attributes of the XRP Ledger seamlessly integrate with the operational needs and supply control mechanisms central banks require.

Global Expansion Amidst Regulatory Challenges

Remarkably, XRP’s appeal to central financial institutions unfolds against the backdrop of ongoing litigation with the U.S. Securities and Exchange Commission (SEC). Despite this legal uncertainty in the U.S., Ripple’s CEO, Brad Garlinghouse, reports a surge in XRP liquidity outside the country, notably in Asia. This growth is particularly significant given XRP’s value fluctuated following the SEC lawsuit but has since rebounded, appreciating over 100% since the start of 2021. Currently, XRP boasts a market capitalization exceeding $21 billion.

Banque de France’s exploration of XRP as a CBDC platform establishes a noteworthy precedent, signaling a potential transformation in how central banks perceive blockchain technology and digital currencies. It underscores the dichotomy of XRP’s thriving international presence alongside its regulatory challenges in the United States, offering a complex yet captivating portrayal of its evolving role in the digital currency landscape.