Financial Industry Leaders Say Ripple Can Replace the Traditional Banking System
While it is a plain fact that Ripple (XRP) has been one of the poorest performing top-ten cryptocurrencies for the last two years, it still remains popular within the financial industry.
A latest report from an independent panel of financial industry leaders - “Group of Trinity” - says that Ripple technologies are currently much ahead of traditional banking solutions and could serve as a model for the next-generation central bank digital currencies (CBDC).
As China steps-up measures for its Digital Yuan, the report also asks central banks and other regulators to take innovative measures and research for a CBDC.
Having a CBDC based on the XRP-based model can be a game changers as per the experts. The report states: “It is possible that such a stablecoin could be valuable for cross-border payments, serving a function similar to that offered in the private sector by Ripple, a real-time gross settlement system, currency exchange, and remittance network whose digital currency, XRP, leapfrogs slow and expensive correspondent banking”.
Apart from XRP, the San Francisco-based blockchain startup has also got other solutions in the market. Popularly known as RippleNet, a consortium of over 200 banks and financial institutions, Ripple offers instant low-cost cross-border payment settlements using this blockchain-based solution.
Payment services providers like MoneyGram and banking giants like the Banco Santander Bank also use RippleNet solution to facilitate their cross-border payments.
While the report goes to appreciate Ripple technologies, it says that it would be gullible to think that cryptocurrencies can replace central-banks-driven monetary systems.
“The libertarian view that a superior private sector currency (such as a cryptocurrency) could somehow supplant a government currency is utterly naïve. The long history of currency shows that while the private sector may innovate, in due time the government regulates and appropriates. Currency competition between the private sector and the public sector is never a level playing field,” the report states.
The report calls on the regulators for staying a bit lethargic to create the basic infrastructure and launch new payment processing systems.
The recent moves from the global regulators, however, suggest that there are now efforts in place to create mutual synergies between the traditional systems and the crypto industry. For e.g. central banking institutions in Europe and Asia has fast-tracked their work on CBDCs. Also, American lawmakers recently passed a law allowing national banks to offer crypto custodial services. This was a much positive news for the crypto market.