The cryptographic company Ripple (XRP) is optimistic about the future of Central Bank Digital Currencies (CBDC) and believes that they can play a crucial role in global financial inclusion as much as cryptocurrencies.
Yesterday, the well-known provider of infrastructure for digital currency exchanges and remittance services published a white paper that closely examines the advantages of CBDCs and analyzes the contexts and methods in which they can be integrated into today’s economic society.
Let’s see all the details below.
Summary
Ripple (XRP) and the trust in the coexistence of CBDC and crypto
Ripple, a crypto company specialized in interbank exchanges and remittance, yesterday published a white paper explaining the basics of the so-called CBDC, the advantages, risks, and functions that they are likely to play in the future within the monetary models of the coming years.
According to the vision of the cryptographic society, CBDCs will play a crucial role in global financial inclusion, simplifying cross-border payments, and strengthening central banks’ monetary policies.
In the document it can be read that
“CBDCs are necessary to support the most significant positive impacts of asset tokenization, an increasingly targeted mechanism for transforming tangible assets into digital tokens stored on the blockchain.”
The main obstacles according to Ripple concern the absence of clear regulation in this matter, which could push various companies and institutions to adopt more frequent payments with this digital currency.
Other factors concern a poor protection of privacy for its supporters, and the lack of interoperability between CBCD and offline access to transactions.
Anyway, these would be minor problems that, moreover, cannot be solved due to their nature.
Despite this, experts’ predictions tell us that CBDCs will reach a valuation of 5 trillion dollars in the next 10 years, reaching a market capitalization similar to that of gold.
Ripple itself is very active in the development of this niche sector, being able to count on a series of successful collaborations with more than 20 financial institutions in Bhutan, Palau, Montenegro, Colombia, and Hong Kong.
In November, Ripple’s Vice President James Wallis expressed the same optimism for central banks’ commitments. Wallis argues that CBDCs provide an economically advantageous solution by allowing financial services at a significantly lower cost compared to traditional methods.
Outside the Ripple ecosystem, however, the crypto world is not so enthusiastic about the advent of CBDCs.
These latter, in fact, go against the fundamental principles of decentralization and freedom from financial intermediation.
Although they can be extremely efficient and extremely useful for a wide range of financial operations, this kind of digital currencies imply the need to place trust in central entities.
Exactly the opposite of what was professed in the early years of the spread of Bitcoin and the rest of the cryptocurrencies.
Price analysis for XRP
In the medium term, XRP in the chart against the US dollar seems ready to ride the bullish market expected in the next year, in which the king of the market Bitcoin will complete its fourth halving in history.
The Ripple cryptocurrency currently has a price of $0.629 with a market capitalization of $31 billion and a trading volume of around $1.4 billion in the last 24 hours.
Since the beginning of the year, the currency has increased by 86%, going from 0.34 dollars to the current values.
The price action of the currency is not entirely clear and shows a somewhat confusing trend, probably fueled by manipulations by large holders.
Anyway, XRP has always made a decent figure in every bull market, registering significant increases in its value.
Prices remain above the EMA 50 daily and allow for further bullish leg up from here until the end of the year and beyond.
The chances of a bullish inclination of the pattern increase dramatically with the surpassing of the $0.7 threshold, the main resistance in the Ripple cryptocurrency chart.
Although the XRP forecasts against the US dollar are optimistic, we cannot say the same when analyzing the XRP-BTC trading pair.
The altcoin in question has never been able to beat the benchmark by achieving better performance than the market king in every bull cycle, with the exception of limited periods of time between 2017 and 2018.
Looking at the chart against Bitcoin, it is evident that Ripple’s crypto is clearly being crushed by continuous declines in recent years.
Prices are well below the EMA 50 weekly, which has been surpassed only on a few occasions, which have proven to be excellent areas to short the asset in the future.
XRP may therefore have a good performance against USD or other FIAT currencies in the medium term, but in the long term it is almost certain that it will move less efficiently than Bitcoin, which still leads the cryptocurrency market after years.
If XRP were to surpass the 0.00004 sats level in the future, with confirmation from a monthly close above that level, we could reconsider the bearish bias and consider possible bullish scenarios.
At the moment, however, all this is highly unlikely.
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