The Launch of a USD-backed CBDC Will Not Affect XRP’s Demand, Says Ripple’s CEO

News / 18.02.2020

The race to launch a CBDC among central banks worldwide is still on as nations like Singapore are working on its development while China is getting ready to launch its own in 2020. However, people are focusing on the U.S. Federal Reserve and its likelihood of releasing a CBDC backed by the USD.

In recent times, reports have it that the Head of Blockchain technology at JP Morgan said that the company would not release its JPM Coin if the Federal Reserve released a coin.

Ripple’s CEO, Brad Garlinghouse was interviewed by Julia Chatterley of CNN recently and he talked about the likelihood of a ‘Fed Coin,’ and its impact on the firm. He said he is not sure whether they will evade commercial banks in most of Europe and the United States, but Ripple will remain focused on commercial banks and payment providers whether the launch happens or not.

Nevertheless, the CEO noted that the firm is willing to provide services to other types of customers, as he compared the company’s growth to that of Amazon when the internet just emerged.

Garlinghouse addressed the company’s rate of expansion: the company considers itself a blockchain infrastructure firm. He continued that they have worked on cross border payments as a pioneering vertical and they are committed to doing other verticals using these technologies.

Nonetheless, against the JP Morgan’s Head of Blockchain sentiment, Garlinghouse said the continued existence and use of XRP is not based on whether the Federal Reserve releases a Fed Coin.

He continued that it will still be essential to have an ideal cross-border settlement dynamic thereby requiring a neutral, cross-border settlement asset such as XRP, even when the Fed Coin is launched.

His view seems interesting as several Federal Reserve officials have recently come out publicly to rubbish cryptocurrencies and tease the launch of this much-expected Fed Coin. Just as public officials mistrust cryptocurrencies like BTC and XRP, numerous individuals believe the Fed Coin would present a challenge to the same.

Featured image courtesy of VOX. Source: Cryptopress.

Sudarshan M is a long time crypto-enthusiast. Pulled in by bitcoin early on, it did not take long for Sudarshan to divert all of his academic attention from business studies to blockchain by doing his Masters and eventually pursuing his PhD in the subject.