The World Economic Forum ( WEF) is in the process of evaluating XRP, the native currency of Ripple, as the most appropriate cryptocurrency in the digital currency room of the emerging central bank (CBDC).

The WEF argues that central banks and government agencies weigh the capacity of CBDCs to resolve concerns such as finance and the stability of the payment system. The Geneva-based international organization also made a vital distinction between CBDCs and cryptocurrencies.

“CBDC is a digitized version of sovereign currency, created and issued by, and a liability of, the country’s monetary authority. CBDC differs from other forms of digital or virtual currencies, including cryptocurrencies such as Bitcoin and ‘stablecoins,’ which are not issued by central banks or typically considered legal tender.”

According to WEF, XRP is the most important cryptocurrency in the wholesale space of CBDC for intra or inter-bank payments and settlements.

In a recent blog post, Ripple states that central banks across the globe are caught up in an arms race to establish their own CBDCs. The start-up of payments also demonstrates how central banks can use XRP to encourage and promote the use of CBDCs.

“RippleNet’s On-Demand Liquidity service allows financial institutions to transact in real-time across multiple global markets using the digital asset XRP and such a solution can also support the direct exchange of CBDCs. XRP is faster, less costly, and more scalable than any other digital asset, making it the ideal instrument in bridging two different currencies quickly and efficiently.”

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