James Wallis, Vice President for Central Bank Digital Currencies (CBDC) Engagements at Ripple, recently emphasized the pivotal role of CBDCs in advancing global financial inclusion in a concise video message. Wallis clarified that the primary goal of financial inclusion is to extend essential financial services to individuals worldwide, particularly those with low incomes and no existing connections to financial institutions.
Identifying key factors contributing to financial exclusion, Wallis highlighted low incomes and a lack of ties with financial institutions, resulting in the absence of a credit history. In regions facing financial exclusion, banks often operate as commercial entities driven by shareholder interests, presenting challenges in catering to individuals with limited resources, as generating profits from such demographics proves difficult.
Wallis argued that CBDCs offer a cost-effective solution by facilitating financial services at a significantly lower cost compared to traditional methods. CBDCs provide streamlined payment options and opportunities to establish credit, even for individuals without prior ties to financial institutions.
This, in turn, enables individuals to build credit histories, gain borrowing capabilities, and foster the growth of their businesses. Wallis concluded that CBDCs represent a transformative innovation addressing global challenges in financial inclusion.
Ripple is actively collaborating with over 20 central banks globally on CBDC initiatives and serves as the technology partner for the second phase of the CBDC project in the Republic of Georgia. Additionally, Ripple is involved in CBDC collaborations in Bhutan, Palau, Montenegro, Colombia, and Hong Kong.
It’s worth noting that Ripple is currently embroiled in a legal battle against the SEC. Despite this, the company received recognition from Currency Research in July for its contributions to digital currency advancement and its notable sustainability initiative, particularly in fostering innovation in CBDCs. Prior to partnering with the National Bank of Georgia for the digital lari project, Ripple had proactively aligned itself with organizations exploring CBDC implementations.