David Schwartz Discusses the Impact of CBDCs on Financial Freedom
Ripple’s Chief Technology Officer, David Schwartz, sparked a discussion on central bank digital currencies (CBDCs) and financial freedom. In a post on X, he said CBDCs are neither good nor bad by nature. It depends on how they are used.
Schwartz stated, “If a CBDC creates more options for people who want to use it, that’s good. If it becomes an excuse to hamper other options more consistent with individual freedom, that’s bad.”
He gave an example where some legal businesses cannot maintain banking relationships due to indirect regulations. For them, a government-run “bank” that must defend its decisions in court could be a pro-freedom option. However, this still raises some concerns.
Schwartz emphasized that CBDCs might help people access banking services when private banks deny them. The core issue is how governments or banks use this technology—either to expand or to restrict choices.
Ripple’s Involvement in CBDC Development
Ripple has taken part in several CBDC projects worldwide. The company worked with Palau, Bhutan, Montenegro, Georgia, and the U.K. on early tests. These trials improved Ripple’s XRP Ledger (XRPL) capabilities.
Now, XRPL supports CBDCs as well as stablecoins and tokenized deposits. Leveraging this experience, Ripple launched RLUSD, a dollar-backed stablecoin. It operates on XRPL and Ethereum and has a market value close to $790 million.
Ripple also partners with financial firms like DBS Bank and Franklin Templeton to support RLUSD’s adoption.
Schwartz commented on the “war on cash.” He said banks can limit financial freedom by closing accounts or controlling money access. He compared this to only being allowed to eat at approved restaurants, where people lose choice. Schwartz believes CBDCs could solve these issues if implemented properly.
Global Views and Future of CBDCs
Public opinion about CBDCs remains mixed. On Reddit, users express concerns about privacy and government control. Some cite failed CBDC experiments in Finland, Kenya, and Nigeria as warnings. Others worry central bank digital money could cause economic problems.
Despite concerns, central banks continue developing digital currencies. IMF chief Kristalina Georgieva said digital fiat money is no longer theoretical but becoming real. India’s central bank is testing CBDCs for local and international payments.
India prefers CBDCs over stablecoins for international settlements, with retail and wholesale pilots underway.
The current debate focuses on how CBDCs will be used rather than if they will arrive. Schwartz and Ripple highlight that CBDCs can either expand or limit people’s financial choices.
