Ripple Labs released a whitepaper on the need for CBDCs in the global economy. The paper, titled “The Future of CBDCs,” talks about CBDCs and the issues they would face if released.
According to Ripple, CBDCs are essential to ensure the survival of the fiat system. However, the design and development of CBDCs would differ based on individual countries’ specifications. The difference makes it challenging to conduct cross-border transactions, it said.
The paper said, “It is likely that we will end up with a world of different CBDCs, making interoperability critical. Although most CBDCs focus on solving domestic problems, the global nature of trade and finance means that cross-border coordination is needed, baked into the original recipe of each CBDC.”
Ripple Labs suggested that central banks could solve this problem the same way the world had solved the Internet’s initial problems. The Internet became a tool for information exchange because there was universal agreement to build it using common standards.