A 44-page report commissioned by CPA Australia states that Government and their central banks view the Ripple Network and its native currency, the XRP coin, more favorably compared to Bitcoin and Ethereum because of their centralized nature. The report titled “Central Bank digital currencies: A comparative review” evaluates three of the world’s most transacted cryptocurrencies — Bitcoin (BTC), Ether (ETH), and XRP.
According to the report, Ripple’s centralized operations make the network similar to central banks since this allows developers to control the “timing and quantity of supply” of its tokens.
The report further references Ripple’s Protocol consensus algorithm, adding that it doesn’t run on a blockchain, making it more suited to the requirements of CBDCs.
Ripple recently announced that it is currently testing a private version of the XRP Ledger to facilitate global central banks in the issuance and management of CBDCs. Ripple mentioned that the CBDC Private Ledger is built for payments and is based on the same blockchain that powers the XRP Ledger. Ripple’s coin, XRP, can be leveraged between CBDCs and other currencies.
Ripple’s network is one where selected network nodes can validate transactions making it ideal as a model for CBDCs.
Regarding Bitcoin and Ethereum, the document notes that their fully decentralized nature and inability to be controlled by the state makes neither a potential network for hosting CBDCs.
The document concludes that the COVID-19 pandemic has led the world into a new stage of technological transformation, with accelerated digital payment systems and blockchain projects considering the new social distancing norms.
Related: Check our Ripple Price Prediction
CPA Australia is a professional accounting organization in Australia that has been working since 1886 with more than 166,000 employees in over 150 nations globally.
Since the beginning of this year, XRP has seen stellar growth, having soared by 100%. XRP currently has a market cap of more than $22 billion.