Ripple helping Bhutan pilot its CBDC with its private ledger Technology
Bhutan, the small Asian country, is looking to pilot its central bank digital currency (CBDC) on top of the CBDC Private Ledger technology of Ripple.
This was announced by Ripple and is likely to be a massive boost for the company which is embroiled in a battle with the SEC over XRP. The pilot will be done in collaboration with the Royal Monetary Authority (RMA) and it will cover retail, cross-border and wholesale payment use cases for a digital Ngultrum and will be done in phases. CBDC’s are being piloted in many countries with most of the countries and their central banks opting to use their proprietary technology for the same. This might be difficult to achieve for small countries like Bhutan and hence the need to rely on third-party tech like those of Ripple.
“Our collaboration with Ripple is testament to the potential of CBDCs to provide an alternative and sustainable digital payment instrument in Bhutan,” said Yangchen Tshogyel, deputy governor of the Royal Monetary Authority of Bhutan. “Ripple’s groundbreaking technology will allow for the experimentation of a CBDC with our existing payments infrastructure—while ensuring efficient and cost-effective cross-border transfers.”
No date has been announced for the start of the trial though Bhutan looks to increase its financial inclusion to 85% by 2023. It was at 67% in 2019. The private ledger solution that has been proposed is based on the open-sourced XRP ledger which is said to be 120,000 times more efficient than the usual POS blockchains out there which helps it to take a carbon-neutral approach in the long term. For Bhutan, the use of a proven technology would help to accelerate the overall CBDC program.
“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,” said James Wallis, VP of Central Bank Engagements at Ripple. “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.”
Ripple has been at loggerheads with the SEC for over a year now regarding the classification of XRP as a security with the SEC looking to punish some of their executives for pushing investors and traders to trade and invest in XRP without the requisite licensing. This has been one of the longest-running legal battles in crypto history so far but this resounding approval of its technology from Bhutan should be a shot in the arm for the company.