Maintained by a global community of businesses and developers, the XRP Ledger (XRPL) is a decentralized, public blockchain designed for high-performance and low-cost transactions.
Introduced by India's finance minister in February 2020, the Digital Rupee (e₹) is a tokenized digital version of the Indian Rupee, issued by the RBI as a Central Bank Digital Currency (CBDC). The Digital Rupee is divided into two segments : Wholesale (e₹-W) for financial institutions and Retail (e₹-R) for consumer and business transactions.
Ripple's XRP Ledger is being adopted by the RBI to leverage its robust blockchain technology and secure transaction capabilities, for the Digital Rupee project. Ripple’s XRP Ledger provides a decentralized and transparent platform for the Digital Rupee, ensuring secure and efficient transactions.
The use of XRP Ledger in Digital Rupee facilitates faster and more cost-effective cross-border transactions, a significant advantage for the Indian economy. Notably, XRP ledger has low cost transaction and transactions cost only fractions of a penny.
Besides, with XRP Ledger RBI wants to leverage its scalability and speed as it can handle a high volume of transactions per second (up to 1,500), ensuring the Digital Rupee can support large-scale financial activities without delays.
Additionally, the robust security features of the XRP Ledger protect against fraud and ensure the integrity of transactions.
The XRP Ledger's interoperability with other financial systems allows seamless integration with existing banking and financial infrastructure.
The integration of XRP Ledger is expected to streamline digital transactions, reducing the time and cost associated with traditional banking methods.
The Digital Rupee, powered by XRP Ledger, can reach remote and underserved areas, promoting greater financial inclusion.
Faster and more secure transactions can boost economic activities, supporting India’s overall economic growth.
The transparent and traceable nature of blockchain technology helps in adhering to regulatory requirements, making the system more reliable.
This strategic move by RBI not only modernizes India’s financial infrastructure but also positions the country at the forefront of the global digital currency landscape.
In September this year, RBI revealed that as of June 2024, there were five million digital rupee users and 420,000 merchants participating in the retail central bank digital currency (CBDC) pilot, which commenced in late of October 2022.
It is to be noted that several Indian banks have already partnered with Ripple to leverage its blockchain technology for cross-border remittances and payments. In September 2020, HDFC, India’s largest private bank, has onboarded Ripple’s global payment network 'RippleNet'. IndusInd Bank has partnered with Ripple to revolutionize cross-border payments using Ripple Net. This partnership aims to provide instant settlements and secure transactions.
Kerala headquartered Federal Bank has also collaborated with Ripple to enhance its remittance network, making cross-border transactions safer and more efficient. Kotak Mahindra Bank is another major Indian bank that has joined RippleNet to facilitate seamless cross-border payments.
These partnerships highlight the growing adoption of blockchain technology in the Indian banking sector to improve transaction speed, security, and cost-efficiency.
Ripple's XRP Ledger (XRPL) is being adopted by several countries for their Central Bank Digital Currency (CBDC) projects. Some of these countries include Hong Kong, Bhutan, Palau, Colombia, Montenegro, Russia, Japan, the United Arab Emirates (UAE), Uruguay, and New Zealand. These countries are leveraging XRPL's advanced technology to create efficient and secure CBDCs.
Ripple has also been in talks with over 30 countries to adopt its XRPL-powered CBDC platform.
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