Ripple believes that governments should enable CBDCs to their fullest capabilities to support their constituents and unleash the next wave of financial <a href="https://ripple.com/insights/unlocking-financial-inclusion-with-cbdcs/">inclusion</a> and <a href="https://ripple.com/insights/ripple-pilots-a-private-ledger-for-central-banks-launching-cbdcs/">innovation</a>.

Ripple On CBDCs

Proponents of <a href="https://ripple.com/lp/cbdc-whitepaper/">central bank digital currencies (CBDCs) </a>often point to the additional fiscal policy options that CBDCs enable such as efficient stimulus payment delivery. The COVID-19 pandemic highlighted this weakness in the U.S. financial system when the government struggled to deliver CARES Act payments quickly to those in need. As a result, the banked population with higher incomes quickly received their stimulus payments, while the unbanked and underbanked population—those in the most need of financial relief—were at the end of the line.

Reaching The Unbanked & Underbanked

Depending on a CBDC platform’s structure, CBDCs could be deposited directly into <a href="https://ripple.com/insights/the-global-shift-to-explore-cbdcs/">digital wallets </a>nearly instantly. In the model where citizens had accounts at their central bank, stimulus payments from the central bank could be delivered in seconds, assuming adequate Know Your Customer (KYC) checks were in place at a national level. In the indirect two-tier model, where commercial banks remain central to the financial system, stimulus via CBDCs could still be faster than today’s model.

Instantly Deposited Into Digital Wallets

Ripple VP of Central Banks Engagement, James Wallis, shares how CBDCs can enable the next wave of financial inclusion and innovation—in fiscal policy and beyond.

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Cryptocurrency

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Money & Investments

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