In a recent Blogpost, Ripple builds the case why CBDCs are necessary and what is the progress the market is seeing.
CBDCs on the Rise
The blogpost titled ‘CBDCs: A New Chapter in Global Banking’, discusses the advantages of the innovation. According to Ripple, 9 out of every 10 Central Banks are currently exploring CBDCs. In fact, 11 countries, including China, have already launched their respective digital currencies.
The blogpost highlights that there is an overwhelming support for CBDCs in the financial circles. 90% of the global leaders believe that CBDC will have a crucial role in shaping the society in the next three years. Further, 80% of them are interested in integrating crypto in business operations. It is believed that CBDCs will impact many sectors of finance.
Nine out of ten central banks are actively exploring CBDCs and @juniperresearch predicts CBDC payments could reach $213 billion by 2030.
— Ripple (@Ripple) September 19, 2023
As of June 2023, Ripple has reported that CBDC exploration is underway in more than 114 countries, encompassing over 95% of the global GDP. According to information from the Atlantic Council, 11 nations have successfully launched their digital currencies, while an additional 20 countries are planning to kickstart substantial CBDC pilot programs within the same year.
CBDCs for Financial Infrastructure Development
Ripple underscores China’s prominent role in this field, where monthly digital yuan transactions have exceeded $3.6 billion. Furthermore, even smaller nations like Palau are actively exploring the potential of digital currencies to promote sustainability and enhance financial inclusion.
CBDCs are of particular importance for countries with weak financial ecosystems. Such countries often struggle with a parallel undocumented economy.
One such example is of South Asian coin country pakistan. The country has a huge smuggling problem. Billions of dollars are lost every year because of cash-based illicit businesses.
The news has surfaced recently that the government of Pakistan is looking to develop a CBDC. It is notable that in its annual financial stability report, published in August, the State Bank of Pakistan had acknowledged the role Ripple’s native XRP could play to strengthen the country’s financial ecosystem.