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Ripple is rolling out a proprietary platform for central bank digital currencies (CBDCs), enabling central banks, governments, and financial institutions to create their own digital currencies.
Described as “a frictionless end-to-end solution,” the Ripple CBDC Platform builds on Ripple's Private Ledger, which was first introduced in 2021 for CBDC issuance. It's based on the same blockchain technology as the XRP Ledger (XRPL), which was also designed primarily for payments.
A Ripple spokesperson said that central banks aren't required to interact with the cryptocurrency XRP when using the platform, but they will have that option.
“As a trusted partner to several central banks, we believe this platform will help solve problems for many central banks and governments who are devising plans and developing a technology strategy for CBDC Implementations,” said Ripple's vice president of CBDCs James Wallis.
According to Ripple, the new platform enables government institutions to oversee and customize every aspect of the CBDC's life cycle, including its creation, distribution, redemption, and removal from circulation.
“Not only can CBDCs play a role in effective and efficient payments, but they are being increasingly recognized as a platform for innovation—opening up new possibilities that are not possible with traditional money," said Wallis. "It is not just about the central bank but it’s about any application of the technology that might be of use in the future. This will be accelerated by the private sector building new business models on top of the core CBDC infrastructure that the central bank provides.”
Financial institutions will also be able to use the platform to manage the distribution processes involving the CBDC, whereas end users–both corporate and retail–will be able to securely store their digital currencies and use them for purchasing goods and services, similar to how existing payment and banking applications function.
This includes the convenience of offline transactions and accommodating non-smartphone scenarios, per the crypto firm.
Ripple will demonstrate the platform's capabilities through the e-HKD pilot program, conducted by the Hong Kong Monetary Authority, which acts as the de facto central bank.
“Our new partnership with Hong Kong’s Monetary Authority will showcase a real estate asset tokenization solution, leveraging Ripple’s CBDC Platform, as part of their inaugural e-HKD Pilot Programme," said Wallis. "In this way, CBDC technology is transforming the payments system and we expect to see real-world use cases such as this increasing in the future.”
The firm is collaborating with Taiwan's Fubon Bank to develop a product for tokenizing real estate assets and facilitating equity distribution within the framework of the e-HKD pilot program.