Home News Ripple is helping Bhutan pilot a CBDC

Ripple is helping Bhutan pilot a CBDC

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The Royal Monetary Authority of Bhutan (RMA) has entered into a partnership with the fintech company Ripple. The purpose of the partnership is to conduct a pilot test of the Central Bank’s digital currency (CBDC).

Ripple is confident that the XRP Ledger distributed registry technology and the company’s CBDC solution based on it are able to ensure the implementation of fast and cheap retail, wholesale, as well as cross-border payments.

The company believes that the use of the XRP Ledger provides central banks with greater control over the issuance, management and confidentiality of CBDC compared to public blockchains.

Successful retail digital currency

“The CBDC solution is specifically designed to process payments in the transaction volume required for a successful retail digital currency. It provides central banks, such as the RMA, with security, control and flexibility. Which are necessary to deploy a CBDC without compromising financial stability or monetary policy objectives,” the statement said.

Bhutan’s gross domestic product was $2.5 billion in 2020, despite a population of around 800,000 people. Many news agencies reported on the country’s “gross national happiness” as an alternative to traditional finance. Despite this, thousands of Bhutanese citizens do not have access to a savings account or credit card.

The RMA intends to increase the availability of financial services in the country by 85% by 2023, making payments with CBDC “easier, faster and more affordable”.

A serious impetus for the introduction of Ripple technology

Recall that in early 2021, Ripple said that they were discussing the use of the XRP registry as the basis for a CBDC “with various central banks around the world”. The general manager of RippleNet, Asheesh Birla, made this announcement.

“CBDC will be a serious impetus for the introduction of Ripple technology. We are in the process of discussing the strategy with various central banks around the world,” the top manager explained. He also added that the COVID-19 pandemic contributed to the active expansion of the number of RippleNet participants.

In March, the company announced that it was testing a private version of its distributed registry designed for these purposes.

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