Banks NEED XRP Mainnet Despite Private Ledgers | Sidechains, CBDCs & Cross-Chain Bridges Explained

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Even though banks and financial institutions can use private ledgers, they still end up needing the XRP mainnet to hit the kind of efficiency and cross-border compatibility that large-scale operations tend to require. Private ledgers are usually treated more like secure sandboxes...useful for internal testing and limited use cases—but they don’t offer the broader liquidity and international reach that the public mainnet brings to the table.

Take CBDCs from countries like Japan, Brazil, and Argentina, for example. These digital currencies rely on XRP as a kind of neutral middle-ground asset when settling payments between different national systems. They use tools like XLS-38 sidechains and bridging tech that allow private networks to sync up with the public chain, creating a system where value can move smoothly between very different financial structures. That’s something stablecoins generally can’t do, since they’re often stuck within the rules of specific jurisdictions and don’t have the same flexibility.

The rollout to institutional use hasn’t been rushed, either. Big banks have been working with this tech for over ten years now, slowly testing and adjusting before moving closer to full-scale mainnet adoption. To actually make this system work on a global scale, XRP would need to reach a price high enough to support deep liquidity for very large transfers. That kind of demand isn’t coming from hype—it’s based on what the system actually needs to run properly.

Ripple’s broader idea—building an “internet of value” where CBDCs, stablecoins, and other digital assets can all link up across borders—relies on this mix of closed testing systems and open public infrastructure. As more institutions build out their operations and start linking their private sidechains to the public mainnet, demand for XRP in higher denominations will likely grow out of necessity. At that point, understanding the gap between the utility of the XRP protocol and the actual value of the token itself becomes a key part of figuring out its role as an investment.