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Bhutan’s central bank, the Royal Monetary Authority (RMA), is piloting its central bank digital currency (CBDC) using Ripple’s CBDC Private Ledger to improve financial inclusion among citizens and boost cashless payments.
Latest Country To Explore CBDC - Bhutan
The RMA is planning to pilot the digital version of Bhutan’s currency, Ngultrum, using Ripple’s sustainable blockchain technology to increase financial inclusion to 85% by 2023. The CBDC will be piloted in retail, cross-border and wholesale payment use cases, with the help of Ripple’s CBDC Private Ledger, which will allow the RMA to access a network of CBDC Ledgers for full settlement interoperability. “
RMA Deputy Governor Yangchen Tshogyel believes that digital currency could pave the way for a sustainable payment option in the country.
“Our collaboration with Ripple is testament to the potential of CBDCs to provide an alternative and sustainable digital payment instrument in 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.”
Financial Innovation Meets Sustainability Initiative
However, this is not the RMA’s first rodeo in financial innovation. In 2019, the bank launched the Global Interchange for Financial Transactions (GIFT) program to enable electronic transfers of large amounts and bulk payments. The bank also supports the government’s public Electronic Public Expenditure Management System (e-PEMS) for smoother transactions between the government and banking systems.
Through the CBDC pilot, the RMA is banking on Ripple’s commitment to sustainability. As the only carbon-negative country globally, Bhutan’s government agencies are always on the lookout to maintain their sustainable status through eco-friendly initiatives. Ripple’s agenda to achieve carbon-neutrality by 2030 aligns with Bhutan's unwavering focus on reducing its negative impact on the environment. The CBDC Private Ledger is carbon neutral and much more efficient than energy-intensive PoW blockchains. Plus, the CBDC Private Ledger provides central banks like RMA the security, control, and flexibility needed to deploy a CBDC strategy without compromising its financial stability and monetary policy objectives.
James Wallis, a VP at Ripple, believes that the partnership will provide superior functionality and interoperability, in addition to a sustainability-focused approach.
“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.”
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