IMF Is Working With Ripple To Develop A Global CBDC Platform
Following the International Monetary Fund’s (IMF) recent announcement that it is working on establishing a platform for central bank digital currency (CBDC), the XRP Army has unearthed a report linking the global financial organization to Ripple.
The IMF CBDC Platform
According to reports, the IMF is developing a CBDC platform to establish seamless cross-border transactions. According to the international regulatory body on finance matters, fragmented national propositions are inadequate for CBDCs’ progress.
Hence, the IMF requires interconnected systems that transcend national borders to foster efficiency and equity in transactions, says Kristalina Georgieva, Managing Director of the IMF, in a recent statement. Thus, the global financial organization is developing an international CBDC platform to enhance cross-border payments.
Furthermore, the IMF official wants central banks to adopt a single regulatory framework for digital assets to ensure global interoperability. However, Georgieva warned that privately issued cryptocurrencies could see widespread usage should a common CBDC platform fail to emerge.
The IMF director buttressed her argument with the high rate CBDCs are being implemented globally. So far, 114 central banks are actively exploring how to create comprehensive use cases for CBDCs, “with approximately 10 of them successfully reaching the end of their efforts,” she added.
The IMF has been against adopting cryptocurrency as digital assets threatening traditional global financial systems. The organization has been vocal against El Salvador’s decision to recognize Bitcoin as a legal tender to revive its ailing economy.
However, crypto enthusiasts believe digital assets are the answer to the financial dominance of organizations like the IMF because they give everyone a sense of financial inclusion and freedom.
The Ripple – IMF Link
Recently, the XRP community revealed that it had discovered an IMF report from March 2023 that mentioned using Ripple and its native token, XRP, as essential elements in developing a worldwide CBDC platform. The report presents a global marketplace model for creating an efficient cross-border exchange of virtual assets.
According to the IMF, the current status of the model is exploratory, aiming to establish an initial framework that would further stimulate deeper analysis and discussion. The report also argues that establishing a tokenized money marketplace would enhance interoperability and cost-efficiency in foreign exchange transactions.
The interoperability part involves the seamless transfer of funds within domestic or international boundaries, ensuring efficient and seamless settlement of transactions. Apart from this, the foreign exchange dimension focuses on cross-border situations, facilitating the seamless conversion of one currency into another.
Moreover, the report highlighted three models for a functional CBDC marketplace. One such model is a private settlement token like Ripple’s XRP, an open-source marketplace like that of the Stellar Foundation to decentralized finance (DeFi), and a settlement asset not backed by any crypto token like Strike, which utilizes Bitcoin and the Bitcoin Lightening Network.
Per the authors, adopting a public solution like Ripple presents substantial advantages as it allows operation under the regulation of a private entity. This is beneficial because it would address the challenges associated with centralized participation and liquidity.
Also, it would establish a transparent and reliable governance structure to ensure operational stability. Moreover, strict financial integrity standards would be guaranteed, ensuring compatibility with other systems.
Notably, Ripple Labs’ partnership with the IMF has some history, dating back several years. A presentation by Sagar Sarbhai in November 2018 disclosed that Ripple was chosen to be part of the High-Level Advisory Group on Fintech.
Furthermore, Chris Larsen, the Executive Chairman of Ripple, holds a distinguished position as a member of this advisory Fintech group. Thus, the XRP Army believes the IMF is considering using Ripple for its CBDC project.
Meanwhile, the price of XRP remains rangebound, trading around $0.4964 after it failed to break out of the resistant level over the last seven days.
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