Arab Monetary Funds Chooses RippleNet as an Alternative to CBDC
A recent report by the Arab Regional Fintech Working Group lists the several risks associated with the issuance of CBDC.
The Nuances of the AMF Report
According to the new report that specifically highlights the risks affiliated with CDBC includes,
"Ranging from the risk of digital dollarization, international spillovers and the impact of the international role of currencies."
The report further states that the use of CBDC could lead to the local currency losing basic functions such as becoming a medium of exchange, unit of account, or storage of value.
Additionally, the decision of issuing CBDCs to nonresidents can prove to be a good move as the report claims that,
"Can result in an increase in exchange rate volatility and change in capital flow dynamics since CBDC characteristics make them appealing to investors as an alternative financial instrument."
Thereby, the report concludes that CBDCs are indeed a blessing in disguise.
Why Opt for RippleNet?
The following alternatives to CBDC include the SWIFT payments system, Revolut, London FinTech Wise, and RippleNet. The Arab Regional Fintech Working Group suggested the use of SWIFT GPI and RippleNet to central banks of Arab to improve "messaging protocols."
This is not the first time that the Arab Monetary Fund has had its interest piqued in Ripple. Last year September, Ripple and the Royal Monetary Authority of Bhutan had announced their partnership.
The move to adopt RippleNet has been an objective to encourage digital and cross-border payments and extend's its commitment to sustainability. The adoption of the payment tech predicts a bountiful future.