Will Ripple’s RippleNet Become Irrelevant If U.S. Fed Develops Its Own Payment Solution?

Ripple could lose the majority of its clients if the United States government also opts to develop a blockchain-based payment solution. 

Fintech company Ripple is gradually becoming one of the most popular names in the global payment industry. 

The company’s payment solution, RippleNet, has been widely adopted by top banks and top payment providers due to its prowess in cross-border settlements, which features fast, efficient, and low-cost transactions across borders. 

According to Ripple, over 200 financial institutions globally, including banks, have tapped their payment solutions for cross-border settlements. 

With Ripple gradually regarded as the go-to for payment companies looking to speed up their transaction processes at a relatively low-cost, many have tipped that more financial institutions will adopt RippleNet in the near future. 

Ripple Could Become Irrelevant

However, things may not go as expected for the popular blockchain company that uses XRP as a bridge between two fiat currencies. 

Ripple could see its dominance in the payments sector plummet if big players like the United States Federal Reserve decide to create a similar payment solution like Ripple’s initiative. 

In the past, all U.S.-related initiatives have been widely adopted by countries seeking to remain in the good books of the United States. 

It is possible that the Fed could decide to develop its blockchain-based payment solution that settles transactions in a matter of seconds. 

Like the use of XRP as a bridge between fiat currencies of countries involved in the transaction, the United States could develop a Central Bank Digital Currency (CBDC) for the U.S. dollar which will be used to bridge the currencies of involved nations. 

It is worth noting that most central banks and payment companies across the world would trust a payment solution owned and controlled by the United States government rather than relying on a network developed by a private company, which is currently facing a lawsuit for conducting unregistered securities offerings. 

Although there is a tendency that the U.S. government can also develop a solution for cross-border settlements, not too many financial institutions would want to use a payment initiative that is backed by the United States. 

The United States Dollar has depreciated in value in recent times following the unending printing of new banknotes, especially during the era of the coronavirus pandemic, when the government introduced multiple relief funds to citizens. 

Fingers Crossed

At the moment, nothing can be ruled out, as the United States earlier this year published a study into Central Bank Digital Currency for the first time.  

Although the Federal Reserve did not indicate whether it will be launching its own CBDC, the move could trigger other developments in the near future.