Ripple to test, operate Bhutan’s CBDC
Ripple announced on the 22nd that it will collaborate with the Royal Monetary Authority (RMA), the central bank of the Kingdom of Bhutan, to conduct a trial operation of a Central Bank Digital Currency (CBDC).
The network will introduce Ripple’s CBDC Private Ledger to Bhutan’s current payment infrastructure allowing RMA to experiment with retail payments, wholesale payments, and cross-border transactions.
The move also aims to introduce digital payments to improve efficiency and convenience as well as accelerate financial inclusion in Bhutan to 85% by 2023.
It was previously revealed in March that Ripple has been working on developing technology in the field of CBDC by piloting a private version of its public, open-source XRP Ledger. Bhutan has become the first country to deploy this technology in its currency system.
The introduction of CBDC in the economy will allow Bhutan to increase the efficiency of payments and remittances by speeding up processing and reduce costs.
James Wallis, VP of Central Bank Engagements at Ripple, said in the press release:
“We couldn’t be more thrilled to partner with the RMA on its CBDC agenda and foster our shared values in creating a more sustainable, accessible, and financially inclusive reality. In addition to providing the full lifecycle of CBDC requirements, Ripple’s solution offers central banks the superior functionality and interoperability needed to implement global cross-border CBDC payments.”
Bhutan has been working on developing secure and robust payment systems to become a leader in financial innovation. In 2019, the country launched a system for large-scale payments, complementing the government’s management system and streamlining transactions between banks and the government.
The country, which measures its GDP as Gross National Happiness, also sympathizes with Ripple’s commitment to sustainability. Bhutan is currently the only carbon negative country in the world.
Also, Ripple’s CBDC Private Ledger is Carbon neutral and significantly more efficient than proof-of-work blockchains.
The pilot program comes after many countries in the world are looking to adopt CBDC and related technologies.
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