The New York Federal Reserve’s test of digital dollars recently made rounds in a video on the well-known crypto YouTube channel, Digital Perspectives. The narrator emphasized the possible role of XRP, a digital currency, in the experiment.
The Framework of the Experiment
An extensive trial was run on a private, permissioned blockchain. The trial showcased some impressive advantages, especially in terms of transaction speed. Though the exact platform used was kept under wraps, the presenter hinted that it could involve the XRP Ledger or comparable platforms.
Major banks, such as Wells Fargo and Citigroup, had an active role in the trial, contributing to the research into a new technology known as the Regulated Liability Network (RLN). This technology allowed these banks to emulate issuing digital currency, representing customer funds, and settling through Bank Central Bank Reserves on a distributed ledger.
During this comprehensive twelve-week testing period, the RLN permitted banks to mimic the process of issuing digital cash that represented client funds. These funds then went through settlement procedures on a distributed ledger under the purview of Bank Central Bank Reserves.
Results from this trial confirmed the potential of digital dollars to enhance wholesale payments. This aligns with current dialogues around wholesale payments, Central Bank Digital Currencies (CBDCs), and the prospective role of XRP in this sphere. Encouragingly, the trial concluded that under current US law, there were no considerable legal hurdles that would impede the creation of a digital dollar.
XRP: An Underwhelming Performance?
Despite its potential in the digital dollar trial, XRP has seen a lackluster price performance recently. As per CoinMarketCap, it was priced at $0.4681, recording a slight 0.5% drop over the last 24 hours and a marginal 0.3% drop over the previous week.
Despite the dip towards the $0.46 level, and the lower boundary of a descending price channel, some signals suggest a potential upward shift. Until a breakout to the upper border, which would indicate a potential trend reversal, XRP’s price pattern remains bearish, recording regularly lower highs and lows.
Source: https://coinpedia.org/news/ripple-xrp-news-expert-emphasizes-xrps-role-in-new-york-feds-digital-dollar-pilot/