Ripple to Participate in Digital Dollar Development
Ripple Labs will take part in the development of a Technical Sandbox Program for the Digital Dollar Project (DDP), the U.S. central bank digital currency (CBDC).
The U.S. CBDC Digital Dollar Project has partnered with the Ripple blockchain network and several other digital asset companies to create a sandbox to further explore and test the U.S. government digital currency.
Apart from Ripple Labs, fintech companies Digital Asset, EMTECH, and Knox Networks will be involved too. The main area of development will focus on cross-border payments using CBDCs. The joint project is expected to be launched in early October this year.
The sandbox’s development will proceed in two phases:
- Education. Technical data will be collected to evaluate CBDC design options;
- Pilot. Participants will develop and test specific CBDC use-cases and examine their impact on business processes.
Jennifer Lassiter, executive director of the DDP, said the collaborative effort between the private and public sectors will focus on exploring “real-world technology.” Experiments in the technical sandbox, Lassiter said, will also be aimed at developing specific uses for the U.S. CBDC.
It’s worth noting that Ripple Labs will participate in the digital dollar experiments despite the ongoing Securities and Exchange Commission (SEC) litigation against the company.
However, the legal proceedings in the U.S. are not preventing the company from expanding its international presence. In particular, it recently became known that an international alliance of banks from Canada, Australia, and Israel has been created to make cross-border payments using the Ripple payment network. Moreover, the company will take part in cross-border payments in Latin America, providing transfers between Brazil and Mexico.
In early August, Ripple’s role in a government blockchain project in Colombia, designed to store and certify land titles, also came to light. However, the new government froze the project because it is not part of the land agency’s strategic priorities for 2022.
Recall that in March this year, U.S. President Joe Biden signed an executive order granting the go-ahead for research and development of the digital dollar. The release of the financial instrument is planned to be assigned to the U.S. Treasury Department. Their analysts have concluded that a CBDC can improve the banking system’s stability, despite the concerns raised by the Federal Reserve’s analysts. However, about 60% of the U.S. population still opposes the idea of introducing a national digital currency.