ODL Can Act As A Neutral Bridge Between CBDCs Says Ripple’s APAC Policy Director

APAC Policy Director of Ripple, Rahul Advani, while appearing in an interview recently, discussed the ODL (On-Demand Liquidity) service of RippleNet, which is run by XRP (the native digital asset of the exchange). Advani made these remarks in an interview conducted by Bread (a financial news venue). On being enquired about the strategy of Ripple for keeping pace with the spiking demand for the cross-border settlements through crypto, he stated that a prominent issue being resolved by RippleNet is related to the present system of banking.

In his words, a lot of liquidity problems are present and a considerable capital amount is connected with pre-funding. The respective issue is resolved by Ripple with the utilization of a solution named ODL (On-Demand Liquidity).

He added that the customers of their venue can be benefitted from the native token XRP which would play the role of a neutral bridge joining two currencies, which removes the requirement for pre-funding in the target accounts along with lowering the capital overheads thereof as well as the operational charges to a great extent.

According to his perception regarding the CBDC development across the APAC countries, it has come to front that the APAC is a frontrunner in both the wholesale as well as the retail CBDCs. While talking about the future, he confidently mentioned that nevertheless there are some chief issues such as interoperability that need to be dealt with on the behalf of the central banks in terms of cross-border payments.

The executive considers that just like the majority of the countries, as they are endeavoring to manufacture their autonomous CBDCs, the respective platform is forming an effective system that they currently have, signifying that the CBDC-making countries would not be capable of utilizing each other’s central bank-based digital currencies.

In this respect, he moved on to point out, a prominent place is here acquired by interoperability. That is the very point where a noticeable role is played by the XRP as well as the rest of the assets becoming neutral bridges.

In his view, the open-source decentralized and public digital assets can persistently be applicable in the coming days. Thus, Ripple expects that the utility of ODL, as in the case of XRP for neutrally bridging between the currencies, can also provide the same facility to the CBDCs.

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