James Wallis, the Vice President of Central Banks Engagement at Ripple Labs, has shared his take on the evolution of digital payments and the future of retail Central Bank Digital Currencies (CBDCs).
In a recent interview with PYMNTS, Wallis highlighted the growing shift by most central banks toward CBDCs. He believes the change is the banks’ way of modernizing payments by removing third-party intermediaries and promoting Peer-to-peer (P2P) transactions.
Benefits of Retail CBDCs
Wallis believes this shift is essential as digital currencies like CBDCs offer many essentially impossible benefits with traditional money. To Wallis, retail CBDCs will enable faster, more secure, and cheaper transactions for local and cross-border payments.
With the apparent benefits highlighted, the CBDC expert named “interoperability” as a significant factor that can drive the success of this new payment solution.
“A retail CBDC has to interoperate with the existing world and existing payment schemes,” Wallis said. “If you want to go and buy coffee, the merchant has to be able to accept the CBDC the same way as if you went in to pay with cash or with a credit card. … You’ve got the old world and the new world sort of coming together.”
The embrace of CBDCs is growing across the board. A recent report from Ripple Labs highlights that 9 out of 10 Central Banks are exploring the new payment model. Atop this ever-increasing interest, Ripple Labs is playing a crucial role in helping some of the Central Banks bring their CBDC innovations to life.
Wallis is optimistic about the future of retail CBDCs as it combines blockchain security with the innovative capabilities of decentralized technologies.
XRP’s Role in CBDC Evolution
With XRP designed to play a vital role in the Ripple Labs ecosystem, many experts have hinted at the potential benefits it can gain in its role in CBDC settlement. According to a pseudonymous XRP community member, Lord XRP, the token could soar as high as $10,000.
The rationale for this very bullish prediction is that the coin may prove too scarce if it is used to bridge all the cash.
With links to the Government of Palau CBDC initiative and its partnership with Mastercard CBDC program, Ripple is pioneering the fast embrace of its solution to power a wide array of national digital currencies, with a potential good upside for XRP.