Wo Jake, XRP Ledger (XRPL) contributor and enthusiast of Everscale platform, explained why Federated Sidechains concept is crucial one for CBDCs' progress
Contents

• Federated Sidechains concept looks like smart bet for CBDCs
• One-stop solution for governments and businesses

In 2022, a number of leading blockchains, including Avalanche (AVAX), Polygon network (MATIC), Ethereum (ETH) and BNB Chain (BSC), implemented purpose-made sidechain solutions. XRP Ledger (XRPL) blockchain can supercharge state-backed digital assets with its Federated Sidechains.

Federated Sidechains concept looks like smart bet for CBDCs

Mr. Jake has taken to Twitter to share his estimations of XRPL's Federated Sidechains' role in the development of Central Bank Digital Currencies (CBDCs).

A look on how Federated Sidechains (XBridge) by @Ripple could possibly increase the #XRPL ecosystem's chance at global #CBDC adoption????(1/8)

— Wo Jake (@woj4ke) September 9, 2022

He stressed that governments will definitely need centrally controlled networks for their CBDC developments. However, such platforms can't be built from scratch: they would lack a userbase and liquidity inflow.

Federated Sidechains by XRP Ledger can solve these problems as they can implement every logic, idea and governance architecture required for its issuers.

At the same time, Federated Sidechains are flexible and adjustable when it comes to use cases, adoption and interoperability with mainstream blockchains:

XBridge enables the transfer of assets across different ledgers (ie. XRPL->USD-L). A federated sidechain can be centralized or decentralized, open or private, its validators can follow any consensus mechanism. Any feature can be implemented to enforce law and regulation

One-stop solution for governments and businesses

However, XRP Ledger (XRPL) is not mature enough to onboard such a complex infrastructure "as is": it should gain a userbase, liquidity and "talents" for next phases of development.

As of Q4, 2022, the XBridge amendment that would activate the Federated Sidechains design is being reviewed and tested in the Rippled codebase, Mr. Jack added.

RelatedXRP Ledger Is Taking on Ethereum with Federated Sidechains

As covered by U.Today previously, Federated Sidechains are in development since Q3, 2021: this concept is set to evolve into an alternative to mainstream sidechain solutions.

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