The publication listed payments systems that could serve as alternatives to a CBDC.

The Arab Monetary Fund (AMF) recently issued an exhaustive guide to Central Bank Digital currencies (CBDCs) with a view to inform Arab central banks on various aspects relating to CBDCs. Interestingly, a page of the publication analyzes payment modernization methods that could serve as an alternative to CBDCs, with Ripplenet and Ripple’s XRP listed as an example.

“Main drivers that motivate Arab central banks to engage in a CBDC project, indicate initially the importance of (i) promoting a cashless economy, (ii) improving traceability of transactions, (iii) enhancing remittances for migrant workers, and (iv) accelerating financial inclusion,” the AMF said in an accompanying statement.

The AMF on Ripple

The practical guide issued by AMF listed RippleNet as an example of a payment modernization alternative falling under the category of “Improvements to messaging protocols but continued reliance on correspondent banking for settlement.” Other examples in this category listed alongside RippleNet were SWIFT GPI, Transferwise, Remitly, and Revolut.

The same page referred to Ripple’s XRP under the category of “Cryptocurrencies on public DLT” and remarked it was one of the first cryptocurrencies designed primarily for payments. Unfortunately, the AMF also commented that cryptocurrencies represented a challenge for anti-money laundering and sanction screening. They also represent a threat for currency substitution and could destabilize a country’s monetary and banking systems.

The AMF concluded that “most of these non-CBDC alternatives have significant limitations or flaws. As a result, many central banks continue to undertake proof-of-concepts or pilots with CBDC.”

RippleNet a SWIFT killer?

Last week it was reported that The Clearing House, a known Ripple partner company, is working with Wells Fargo on RTP Service (Real Time Payments), a cross-border payments system, “specifically designed to support digital commerce,” that could potentially replace SWIFT.

According to The Clearing House, the RTP Service includes real-time postings, immediate confirmation and a secure two-way messaging service. Transfers would be immediate and final, offering maximum control to the account holder, just “like cash.”

Meanwhile, RippleNet has openly advertised itself as a rival to SWIFT.

Related Story: Ripple Deploys ‘On-Demand Liquidity’ In The Middle East For Instant, Low-Cost Remittances