FinTech firm Ripple says that it is “piloting” a private version of the open-source public XRP Ledger (XRPL) to allow central banks to create and manage their own digital currencies.

The XRP Ledger was created in 2012 by David Schwartz, Jed McCaleb, and Arthur Britto, and XRP is the native currency of the XRP Ledger.

In a blog post published yesterday (March 3), Ripple said that more than 80% of the world’s central banks are “actively exploring some form of sovereign-backed cryptocurrency”, and that eventually there would be a wide range of central bank digitial currencies (CBDCs).

Ripple says that existing public blockchains cannot meed the needs of CBDCs since “a Central Bank requires more transaction privacy and control over its currency than a public ledger can offer,” which means that it is “most likely opt to create a CBDC on a private ledger that can also operate at the required scale.”

Also, it says that interoperability is crucial:

Additionally, interoperability – the ability for a private ledger to connect with today’s existing global financial infrastructure, as well as other CBDCs and other digital currencies– will be critical. In fact, in its 2021/22 innovation program, the Bank for International Settlements identified interoperability for cross-border payments as a major priority for CBDCs.

Ripple’s proposed solution to this problem is the CBDC Private Ledger, which uses the same distributed ledger technology as the XRP Ledger, which means that it is “built for payments” and “designed for issuing currencies”; XRP could then serve as “a neutral bridge asset for frictionless value movement between CBDCs and other currencies.”

Ripple says that that transactions on the CBDC Private Ledger will be low-cost, reliable, and fast; initially, it will handle tens of thousands of transactions per second (TPS) ” with the potential to scale to hundreds of thousands TPSs over time.”

Ripple is “currently engaged with Central Banks around the world to better understand their goals and assess how the CBDC Private Ledger can help achieve them. “

XRPL co-creator and Ripple CTO David Schwartz says:

The XRPL has been running smoothly for 8+ years w/ billions of $ at stake. The CBDC Private Ledger ensures transaction privacy and security controls combined w/ the reliability and payments proficiency of the XRPL – the best of both worlds.

Monica Long, General Manager of RippleX, “Ripple’s initiative to create an open developer platform for money”, says:

Tokenization has always been a key feature of the XRPL with over 5400+ issued tokens since inception. CBDCs will live on new private ledgers that run parallel to XRPL, using XRP as a bridge to interoperate w/ other currencies. No more walled gardens!

Yesterday, Matt Hamilton, Director of Developer Relations at RippleX, clarified a couple of things for members of the XRP community:

  • “The public ledger is built for payments. And it was built nearly a decade ago, long before banks knew how they would use blockchains. This gives the best of both worlds, a ‘private’ blockchain for intra-bank, but linked to a public one for inter-bank.”
  • “Every single custodial exchange (Bitstamp, Binance, Kraken, Gemini, Coinbase, etc) is a ‘private ledger’. Just run on closed-source software. This is the same, but open source, and decentralised (within that entity).”

Featured Image by “qimono” via

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.