A Deutsche Bundesbank report mentions Ripple and XRP as innovations in the payment landscape for service providers.
#Ripple mentioned in July Bundesbank repor. Notice the "bilateral credit relationships" with addition for #XRP use. Notes SEC, volatility, etc. Interestingly, they also note counterparty risk, which isn't the case with #XRP. https://t.co/I5R6UEI2xn pic.twitter.com/yBYw7Y3JcG
— WrathofKahneman (@WKahneman) December 9, 2023
A recent report published by Deutsche Bundesbank, Germany’s central bank, has highlighted Ripple’s potential to disrupt the financial landscape. Released in July, the report broadly discusses innovation in the global financial system, noting, among other things, how the rise of distributed ledger technology (DLT) and blockchain reduces friction for cross-border transfers.
The Deutsche Bundesbank report cites Ripple as an example in a section discussing DLT-based money forms and infrastructure. In an apparent allusion to RippleNet, which Ripple recently rebranded as Ripple Payments, the central bank report acknowledged the efficiency at which the network brings together payment service providers.
Precisely, the report cites Ripple Payment’s ability to provide a “recourse to bilateral credit relationships.” Using its on-demand liquidity (ODL) solution, Ripple extends credit to customers, allowing them to move funds without pre-funding as in the traditional finance world.
The Deutsche Bundesbank article also mentions that customers may use XRP on the network. However, it acknowledges that the use of the cryptocurrency may entail legal, counterparty, and exchange rate risks. The report explained that Ripple’s ongoing lawsuit with the United States securities regulator and XRP’s volatile nature makes it less ideal for certain payment use cases.
Banks Acknowleges Ripple’s Global Payments Solution
The latest development follows a pattern of praise for Ripple’s innovation in the payment field by leading banks globally. In October, the Nigerian central bank cited Ripple in a report exploring CBDC and global payments.
Similarly, in separate reports, the Bank of America and Deutsche Bank lauded Ripple as a solution to frictions facing global remittances. While the Bank of America edition focuses on payment innovation in the Asia Pacific, Deutsche Bank’s report explains how XRP provides the bridge for moving assets on the RippleNet.
The foregoing acknowledgments evidently underline the relevance of Ripple’s payment solution. It also hints at the potential for additional banking partnerships with a view to promoting the widespread adoption of Ripple’s products.
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