A new study on Central Bank Digital Currencies (CBDCs) by Juniper Research, a digital sector consulting firm, ranked Ripple number one out of 15 competitors including R3, Stellar, Mastercard, G+D, FIS, IDEMIA, and ConsenSys. According to the study, RippleNet’s “existing success and its technological capabilities within the space” as well as “its existing deployments and growth with the emerging space” were key for the ranking. This news was welcomed by Antony Welfare, senior CBDC advisor at Ripple, who also served as an advisor to the U.K. government on blockchain. Welfare referred to the enormous growth potential CBDCs will have by 2030, according to the study, as well as the recognition of what Ripple has achieved and what it is capable of.
The study found that the value of payments via CBDCs will reach $213 billion annually by 2030, with projections of $100 million by 2023. However, it also stated that CBDCs are a very early-stage technology with limited pilot projects and a radical growth potential of over 260,000%. Governments worldwide are interested in pushing CBDC projects to improve access to digital payments, particularly in emerging economies where mobile penetration is significantly higher than banking penetration.
Domestic payments will account for 92% of payments via CBDCs by 2030, with cross-border payments being added later once systems are established and the CBDCs used by each country are interconnected. Ripple’s main use case, cross-border payments, would benefit from such systems, as it would allow the wider payments industry to benefit from CBDCs. Nick Maynard, the author of the report, stated that while cross-border payments currently have high costs and slow transaction speeds, it is not the focus of CBDC development.
Juniper Research also identified a lack of commercial product development as a limiting factor and recommended that future CBDC platform providers develop complete end-to-end solutions that include wholesale capabilities, wallet provisioning, and merchant acceptance to realize the potential of CBDCs.
Although CBDCs currently have a limited number of pilot projects, Ripple already boasts some pilot projects in various countries and is involved in several working groups and foundations in Europe and the UK which provides guidance for CBDCs. For example, Ripple has pilot projects underway in Montenegro, the Kingdom of Bhutan, and the Republic of Palau. At press time, the XRP price stood at $0.4594.
In conclusion, Ripple’s ranking as the number one CBDC provider by Juniper Research, and the potential growth of CBDCs, suggest a promising future for the cryptocurrency market. While there is still much to be done to fully realize the potential of CBDCs, companies like Ripple are setting themselves up for success with successful pilot projects and involvement in the development of these new technologies.
