Ripple, in tandem with the Royal Monetary Authority of Bhutan, will kick off trials for a digital Ngultrum, Bhutan’s national currency.
The enterprise blockchain provider will integrate its distributed ledger technology into the country’s existing payment processing infrastructure with the aid of its central bank digital currency Private Ledger product.
The RMA will use the San Francisco-headquartered company’s CBDC Private Ledger to carry out retail, cross-border and wholesale-payments tests of an electronic version of the Ngultrum, Ripple disclosed in a press release, Thursday.
Sustainable digital payment system
“Our partnership with Ripple is testament to the potential of CBDCs to provide a sustainable and alternative digital payment tool in Bhutan,” Yangchen Tshogyel, Bhutan RMA deputy governor, said.
After the recent CBDC announcement, the price of XRP climbed significantly. Ripple’s CBDC solution leverages a private version of the public and open-source XRP Ledger (XRPL).
The latest program follows the 2019 unveiling of Bhutan’s Global Interchange for Financial Transactions system which allows wire transfer of bulk payments.
Since the beginning of the year, the interest around XRP Ledger has grown substantially. Ripple’s CBDC solution is power efficient. The company also emphasized its CBDC solution is also cost-effective and can deliver results.
Expanding financial inclusion
MRA expects to enhance digital and cross-border payments, Ripple said. The central bank also plans to expand financial inclusion for Bhutan residents by 85% by 2023. As of 2019, based on a document released by RMA, it was almost 68%.
The Private Ledger is said to be 120,000 times more efficient compared to standard proof-of-work (PoW) blockchains making it ideal for a carbon-neutral approach, a news release said. The ledger’s objective is to provide central banks with control and flexibility without compromising monetary policy goals.
Ripple is also promoting the use of its in-house cryptocurrency XRP as a neutral link asset for so-called “frictionless value movement” between CBDCs and other currencies.
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