Bhutan’s Royal Monetary Authority (RMA) joins forces with Ripple to test Central Bank Digital Currency (CBDC) operations.
According to Nikkei, Ripple is working with Bhutan’s central bank to experiment with a Central Bank Digital Currency via Ripple’s CBDC Private ledger.
Dawn of CBDCs in Bhutan
The RMA aims to integrate blockchain technology into Bhutan’s existing payment framework to improve the efficiency of personal and international payments.
The Royal Monetary Authority of Bhutan plans to incorporate blockchain technology over its current payment infrastructure to pilot retail use cases for a digital Ngultrum. The test experiments will occur in different phases while making good use of Ripple’s sustainable blockchain technology.
This alliance with Ripple positions Bhutan’s Central Bank a step closer to its mission to increase financial inclusion in Bhutan to 85% by 2023.
The deputy governor of the Royal Monetary Authority of Bhutan, Yangchen Tshogyel, believes that Ripple’s groundbreaking technology will launch experiments of a CBDC with their existing payments framework. Tshogyel also pointed out that their partnership will ensure efficient and cost-effective cross-border transfers while providing a sustainable digital payment instrument in Bhutan.
Ripple and RMA’s Shared Functionalities
The partnership between Ripple and RMA proves worthwhile since they both share specific features – the commitment to sustainability. Bhutan is the “happiest city in the world” and the only carbon-negative country globally. Nevertheless, according to the public, open-source XRP Ledger, Ripple is carbon neutral and 120,000 times more efficient than proof-of-work blockchains.
The CBDC Private Ledger attests to effectively aid central banks like RMA optimum results aligned with their functionalities. For instance, it provides security, control, and flexibility that RMA requires to install a CBDC strategy without compromising its financial stability and monetary policy objectives.
A Fruitful Partnership
James Wallis, the VP at Central Bank Engagement at Ripple, said they were thrilled to partner with the RMA on its CBDC agenda and foster their shared values in creating an accessible and financially inclusive reality.
Wallis added that their organization’s solution offers central banks the superior functionality and interoperability needed to implement global cross-border CBDC payments.
RMA has had an undisputed need to develop a secure and robust payment system over the years, positioning it as a leader in financial innovation. For example, it launched the Global Interchange for Financial Transactions (GIFT) system in 2019, which allows electronic transfer of enormous value and bulk payments.
The RMA could utilize this partnership to access a network of CBDC Ledgers that enables full settlement interoperability. All the same, Ripple, the leading provider of enterprise blockchain and crypto solutions for cross-border payments, will aid other central banks like RMA in ensuring monetary and technological independence soon.