Ripple aims to secure a portion of the anticipated $5 trillion market for central bank digital currencies (CBDCs) as the financial landscape transforms. In its report, “CBDCs: The Digital Evolution of Money,” Ripple emphasised the growing transformative impact of CBDCs and stablecoins, with 98% of countries worldwide actively engaged in these initiatives.
The company sees CBDCs and stablecoins as powerful catalysts for digitising entire economies and unleashing the extensive possibilities of the Internet of Value.
Ripple’s Take on Global CBDC Trends and Objectives
Ripple highlighted that 130 countries, constituting 98% of global GDP, are actively pursuing CBDC projects. Notably, the United States, South Africa, and various European Union nations are in exploratory phases, while 19 G20 countries are advancing their CBDC initiatives. China is approaching a full-scale launch post-pilot phase, and countries like Nigeria and the Bahamas have live CBDC solutions.
The Bank for International Settlements projects that around 20% of the global population will have access to a CBDC in the coming years. Ripple underscores the systematic objectives CBDCs can address, including financial inclusion, fraud reduction, payment innovation, and a new avenue for monetary policy. The report also highlights CBDCs’ role in positive asset tokenisation impacts and the efficiency gains of wholesale CBDCs in large-scale transactions.
Ripple Navigates New CBDC Risks and Targets $5 Trillion Market
While the deployment of Central Bank Digital Currencies (CBDCs) promises benefits, Ripple identifies new risk factors, with implications varying based on design models. These risks include heightened centralisation of payment processing, the storage of sensitive user data, and challenges in reversing fraudulent or erroneous transactions. Increased reliance on third parties introduces additional vulnerabilities.
Despite these risks, Ripple positions itself in the CBDC ecosystem, recognising opportunities. Projections indicate that approximately $5 trillion worth of CBDCs will circulate in significant economies over the next decade. Ripple asserts that collaboration between governments and private entities to address challenges will determine when CBDCs transform the global landscape.
Notably, Ripple collaborates with over 20 central banks worldwide. It has secured partnerships like the pilot phase with Bhutan in 2024 and its tech partnership with the Republic of Georgia apex bank for pilot 2.