The rise of central bank digital currencies (CBDCs) is rapidly gaining traction as many countries seek to stabilize their economies and take a safer path that mitigates market volatility. With countries beginning to open their doors to fiat-backed digital currencies, the CBDC ecosystem is growing in leaps and bounds, with Ripple now being ranked as an established leader for CBDCs.
According to recent research, Ripple is well-positioned to pioneer growth in the CBDC ecosystem, which is projected to be worth $213 billion in annual payments by 2030. Anthony Welfare, an enterprise blockchain leader and current CBDC advisor at Ripple, brought attention to the research that stated Ripple was ranked number one and an established leader for CBDC from 15 vendors.
Ripple’s existing success with RippleNet and its technological capabilities within the space drove its ranking, as the company has proven its capabilities through existing deployments and growth within the emerging space. Furthermore, the study revealed that CBDC payments are projected to cross $200 billion in the next seven years, with governments leveraging these digital assets to stimulate financial inclusion and increase their control over the methods of digital payments.
The adoption of CBDCs will make accessing digital payments easier in developing countries that prioritize mobile penetration over banking penetration. Additionally, with nearly all of the value transacted via CBDCs being carried out domestically, countries will have more control over their financial systems, with cross-border payments becoming a reality soon as CBDCs become more established.
The role of CBDCs in government-backed projects is likely to accelerate the growth of Ripple within the industry. CBDCs are expected to have a considerable impact on the financial sector, with Ripple well positioned to lead the way in providing the necessary infrastructure for these projects. Thanks to its existing success with RippleNet and technological capabilities, Ripple will be the base layer for the trillion-dollar CBDC market till 2030.
The impact of CBDCs on the market extends well beyond their role as a safer investment than Bitcoin and Ethereum. CBDCs have the potential to reduce the costs of transferring funds for both individuals and businesses. As the adoption of CBDCs increases, so too will the growth of their underlying technology, particularly blockchain, an area in which Ripple has already established itself as a leading player. Ripple’s involvement and experience with blockchain technology will enable it to provide the necessary infrastructure for CBDCs and ensure their scalability and functionality.
The future of CBDCs is bright, with the industry expected to record billions in annual transactions in the coming years. With government-backed projects driving the growth of CBDCs, Ripple is well-positioned to lead the way in providing necessary infrastructure for such projects. If the estimates for the size of the CBDC market and the growth in annual transactions are correct, Ripple will be the base layer for the trillion-dollar CBDC market till 2030.