The adoption and integration of blockchain technology in the financial sector are progressing favorably. However, there might be significant differences between central banks in terms of the scope, details, and function of these alliances.
In a consultation paper on the digital pound, the Bank of England and the UK Treasury made a passing reference to Ripple’s technology. The Central Bank of England outlines the CBDC’s potential structure and the reasons behind its consideration in the 116-page document.
The Bank of England also wants to consult the public this year to get their opinions. If the digital pound is approved, it will likely be introduced in the second half of this decade as an extra choice in addition to physical cash. The digital pound would be held directly at the Bank of England and would be used on a daily basis by companies and families. Digital wallets from private corporations would be the only means of gaining access to the currency.
At this point, it’s not entirely sure what part Ripple will play in the project. The American business is nonetheless cited in the consultation paper’s section on “Enable private sector innovation” and in relation to RTGS (Real-Time Gross Settlement).
According to the paper, the central bank is concentrating on creating a roadmap for continued enhancement of the RTGS service in line with industry feedback and incorporating features from prior feasibility studies and tests as part of the RTGS renewal program. It also stated that the bank and Ripple were working on a “joint project” involving synchronized FX transfers between two separate simulated RTGS systems.
It is still too early to determine whether the Bank of England will collaborate with Ripple on its CBDC project. The links between the bank and Ripple are important, though. XRP is currently down more than 2%, trading at $0.4013.
A few days ago, it was reported that Ripple has partnered with the Central Bank of Montenegro (CBDC) to create a Central Bank Digital Currency. Dritan Abazovi, the prime minister of Montenegro,spoke about the development of a payment infrastructure that would support greater financial inclusion and accessibility at the World Economic Forum in Davos in 2023.