- With digital currencies promising a better future for users, the Digital Currency Monetary Authority (DCMA) has embarked on a journey to help central banks and regulated financial institutions.
- Ripple recently disclosed that it is in dialogue with over 20 central banks on the development of CBDC.
The race to revolutionize global cross-border payments through blockchain technology is on. The argument is that sending cash across international borders should be fast, secure, and cheap. However, the traditional cross-border payment rails are so siloed that a single transaction can take five days and cost tens of dollars to facilitate.
With blockchain technology and the cryptocurrency market offering a better alternative, cross-border payments have become affordable to most users. In return, Web3 protocols have experienced significant growth whereas the global banking sector has been recorded as collapsing.
For instance, the Swiss top bank Credit Suisse recently collapsed and following the intervention of the government, the company was acquired by UBS. Additionally, three regional United States banks including Silicon Valley Bank (SVB), and Signature Bank were on the cusp of bankruptcy before the Fed stepped in to help.
Digital Currency Monetary Authority (DCMA) Unveils CBDC
With digital currencies promising a better future for users, the Digital Currency Monetary Authority (DCMA) has embarked on a journey to help central banks and regulated financial institutions. During the International Monetary Fund (IMF) Spring Meetings 2023, the Digital Currency Monetary Authority (DCMA) announced the official launch of its CBDC to strengthen global monetary sovereignty.
According to the organization, George Walker, a Partner at Practus, LLP, specializing in international law, facilitated meetings between the DMCA and the IMF. Walker insisted that it is only a matter of time before the IMF accepts the CBDC proposal from DCMA.Walker noted.
Although the IMF has not officially endorsed Universal Monetary Unit, in reviewing the DCMA’s Whitepaper and in weekly team discussions, the IMF has yet to state any objections to UMU’s FX premium rates and its monetary sovereignty approach.
Notably, the DCMA has developed a decentralized international banking system dubbed Unicorn Network to connect banks, fintech, and government. The Unicorn Network is powered by the Universal Monetary Unit (UMU), an innovation in the store of value cryptographic cash.
According to Darrell Hubbard, the Executive Director of the DCMA, and the chief architect of UMU, “UMU is not attempting to disrupt the international monetary system. If fact, it strengthens it by helping the IMF achieve its stated mandate to provide economic and financial stability to its member states. UMU is a game-changer in how cross-border payments are transacted and mitigates against seasonal and systemic local currency depreciation.”
Ripple’s Strategy to Win Global Cross-border Payments
On the other hand, Ripple Labs is working hard to win the race for global CBDC infrastructure development. Already, Ripple is working with more than 20 global central banks including Bhutan and Palau to develop interoperable and functional CBDC. Notably, Ripple has dedicated a private version of XRPL to facilitate CBDC and stablecoins development.
