Ripple, a San Francisco-based blockchain company, announced that the company is testing a private version of the XRP Ledger to support central banks in the issuance of central bank digital currencies (CBDCs). The company mentioned that the CBDC Private Ledger is built for payments.
According to the official announcement, the CBDC Private Ledger is based on the same blockchain that powers the XRP Ledger. Additionally, Ripple highlighted the growing interest in CBDCs around the world and mentioned that the arrival of the world’s first CBDC is inevitable.
The blockchain company mentioned that most blockchains are public ledgers and lack the privacy a central bank requires. Ripple added that a private ledger is a more suitable option for a central bank to issue and manage a CBDC. Several digital currencies have been issued on the XRP Ledger over the past few years.
“Moving money on the CBDC Private Ledger will be cost-effective, reliable, and close to instantaneous. Transactions can also happen at volumes required by central banks. The CBDC Private Ledger will handle tens of thousands of transactions per second (TPS) initially with the potential to scale to hundreds of thousands TPSs over time. Transactions on the CBDC Private Ledger are verified by the same consensus protocol used by the XRP Ledger, which is far less energy-intensive, and therefore less expensive and 61,000 times more efficient than public blockchains that leverage proof-of-work,” Ripple mentioned in the official announcement.
Ripple’s Lawsuit and XRP
The US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs and its executives in December 2020 for the illegal selling of securities in the form of XRP. The price of XRP crashed by more than 60% following the lawsuit but it has recovered since then as the world’s 7th largest cryptocurrency is currently trading at above $0.44 with a total market cap of more than $20 billion.
Ripple CEO Brad Garlinghouse provided some updates about the on-going lawsuit on Wednesday. “Today, a letter was filed on my behalf indicating my intent to file a Motion to Dismiss in response to the SEC’s amended complaint against me. Simply put, the SEC’s allegations are a regulatory overreach,” Garlinghouse mentioned.