The central bank of France, Banque de France, plans to pick XRP and Ripple for the central bank digital currency (CBDC) launch. According to CPA Australia’s report, Banque de France is considering XRP and Ripple after foregoing Bitcoin and Ethereum.
Bitcoin and Ethereum Too Risky and Decentralized
The CPA Australia termed Bitcoin and Ethereum as too risky and decentralized to make the cut for use in the CBDC.
Bitcoin is known for its volatility. Its peer-to-peer cash system feature and the fact that any government does not back it makes it very unstable. Compared to the volatility of major exchange rates such as the US dollar against the Euro, bitcoin’s is almost 10 more times. For this reason, the central bank of France decided it was too risky to be used as a means of exchange and therefore rejected it as a basis for CBDC.
Banque de France declined using Ethereum, on the other hand, for its decentralized nature. Ethereum is the most open-ended decentralized software platform. Decentralized applications can run on Ethereum without any control or interference from a third party. It would be difficult for the French government to have any control over it should it be used as a basis for the launch of Banque de France’s CBDC.
XRP and Ripple Make the Cut
CPA Australia reported that XRP and Ripple made the cut in as far as the coins that Banque de France was discussing. Contrary to Ethereum and Bitcoin, XRP is highly centralized and popular in CBDCs for other banks.
Rather than running on a decentralized blockchain like Ethereum, Ripple is selective on the allowed network. It will be easier to control specific network nodes that are permitted to transact on Ripple.
Furthermore, the fact that Ripple permits the creation of new currencies can give control to when developers can create and how much they can create. Ripple and XRP are the best options for Banque de France’s CBDC launch for all these reasons.