CPA Australia, a professional accounting association based in Australia with more than 166,000 members in 150 countries around the world, recently released a report revealing that the French central bank has openly discussed Ripple and XRP as a possible platform for the digital euro.
The company states in the report that the world is entering a period of rapid technological change caused by the COVID-19 pandemic. The crisis has led to the widespread use of digital and contactless payment systems and the development of central bank digital currencies. The report is intended to provide an overview of innovations in digital currency from central banks.
Will The Ripple Network Be Used For A Digital Euro?
The report examines the relationship between Bitcoin, Ethereum, Ripple and stablecoins for CBDCs (central bank digital currencies). While Bitcoin is described by CPA as an overly volatile medium for exchange and storage of value, the report describes Ethereum as a fully decentralized blockchain-based software platform beyond any state control. The report also notes that the Reserve Bank of Australia has issued a statement that it is considering running a CBDC program on the Ethereum network.
In the section entitled “XRP — Ripple’s Digital Token”, CPA Australia refers to “Ripple” as an alternative platform to Ethereum on which a central bank’s digital currency can run.
“Ripple” is an alternative platform to Ethereum. The XRP token is used to facilitate payments. Ripple has its own proprietary technology — the Ripple Protocol consensus algorithm (RPCA) — to verify transactions.
Ripple is trusted by many banks as a model for the CBDCs because it is highly centralized and based on an authorized network where only certain network nodes can validate transactions, unlike decentralized networks like Bitcoin and Ethereum. Ripple also enables the creation of new currencies and Ripple developers can control the timing and quantity of the coins in the same way as current central bank operations.
France Has Mentioned Ripple As An option
As Ross Edwards, Ripple’s Global Head of Client Solutions, explained in a recent presentation, any financial institution can adapt the design of a CBDC proposed by Ripple to meet the demands or needs of a particular economic ecosystem or market. Depending on operational needs, a central bank can change the centralized or decentralized data set, consensus algorithm, accessibility and authorization.
However, the comment below in the report generates the most excitement:
The French central bank, Banque de France, has openly spoken of Ripple XRP as a potential platform for Europe’s central digital currency.
This statement reinforces the rumor that first surfaced in February 2020. At the time, Ripple was mentioned in a Banque de France report on CBDCs. If this rumor is true, it would be a great boost for Ripple and XRP investors.