Despite its ongoing legal troubles, Ripple appears to be continuing its mission to position XRP as a “bridge asset” between Central Bank Digital Currencies (CBDCs). In a recent blog titled “The Future of CBDCs,” Ripple argued,
“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. This solution can also support the direct exchange of CBDCs.”
RippleNet’s On-Demand Liquidity service claims to allow financial institutions to transact in real-time across multiple global markets, using the digital asset XRP as a bridge currency.
In fact, the company has identified a new market within the space of CBDCs, where the same liquidity challenges faced by Ripple’s partner Payment Institutions may be prevalent.
To this effect, the company stated,
“Neutral bridge assets will allow for frictionless value movement between various CBDCs without requiring each one to solve the liquidity challenges inherent in cross-border transactions.”
Further outlining the need for a digital asset like XRP to bridge this gap, the aforementioned report authored by Ripple also explained the barriers impeding a CBDC’s success, while also introducing the means to overcome those challenges.
The said report made the case for a neutral bridge asset that can support healthy, alternative liquidity markets to allow for frictionless, cost-effective value movement between various CBDCs in real-time, before stating that “one example of a neutral bridge is the digital asset XRP.”
The timing of the report is interesting, however, especially since many have posited that Ripple’s future remains uncertain given the nature of the SEC’s charges against it. It should be noted though that litigation on the same will not officially begin until late February 2021.
At the time of writing, XRP was trading above $0.30, up by over 35% in the past 24 hours.