According to a senior executive at Ripple, XRP, the third-largest cryptocurrency by market capitalization, is not in any way competing with the central bank digital currencies (CBDCs) and Stablecoins, but rather contributing to their development.
XRP Is Not Competing With CBDCs and Stablecoins
The senior director of global operations at Ripple, Emi Yoshikawa, has recently pointed out that XRP is neither competing with the underway central bank digital currencies (CBDCs) nor stablecoins.
Yoshikawa said this during an interview with Japanese crypto exchange FXcoin on 19th August 2020. In the course of the conversation, Yoshikawa stated that the digital token XRP is only contributing to the development and progress of CBDC and Stablecoin.
Yoshikawa added that XRP should be seen as a bridge asset in cross-border remittance, rather than considering it as a competition to CBDC and Stablecoin.
Emi Yoshikawa said:
“There are various types of crypto assets, but I think that the role of XRP as a bridge asset in international settlement, and is not competing with stablecoins or CBDC, but on the contrary, is complementary. We believe that various stablecoins and CBDCs will create a synergy by responding to the liquidity problem by bridging independent crypto assets, XRP.”
ODL Is Designed To Eliminate Pre-Funding In Cross-Border Payments
In the interview, Yoshikawa stressed Ripple’s settlement product, On-Demand Liquidity (ODL), which was previously referred to as xRapid.
Ripple’s XRP-based ODL is designed to facilitate quick and reduction in the operational costs of processing cross-border payments. For better illustration, Yoshikawa stated that ODL is created to eliminate pre-funding in cross-border payments.
The Primary Objective That CBDC Shares with Ripple’s ODL
Upcoming China’s digital Yuan is already considered as a threat to the dominance of SWIFT in terms of transaction speed.
Some major banks in the world are already observing the potential of CBDC based on the reduction of the costs of financial operations, which is also the primary of Ripple’s On-Demand Liquidity (ODL).
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