Central Banks Digital Currencies are becoming popular and governments have begun to embrace the idea of a digital currency. South Asian country Bhutan joins the list of countries that have shown interest in digital currencies. Bhutan will start trials on launching a digital currency soon and San Francisco-based blockchain company Ripple will be working with the company.
Ripple’s announcement on the partnership reads “today, we are proud to announce our partnership with Bhutan’s central bank, the Royal Monetary Authority (RMA), who will use Ripple’s CBDC solution to pilot a central bank digital currency (CBDC) in phases. This move is driven by the nation’s desire to enhance digital and cross-border payments, expand financial inclusion efforts and extend its commitment to sustainability as the only carbon-negative country in the world.”
The collaboration with Bhutan’s apex bank will see Ripple integrate its distributed ledger technology with the country’s existing payment system using its CBDC Private Ledger product. The CBDC will be used for cross-border and wholesale payments during its trial phase.
The plan to launch a digital ngultrum (Bhutan’s native currency) seems to be one that the government has been considering for some time. Tashi Yezer, Senior Payments Systems Officer at the country’s apex bank – the Royal Monetary Authority of Bhutan, was one of the speakers at Ripple’s Swell webinar for the APAC region that was held in April.
According to Ripple, Bhutan’s apex bank is leveraging its private ledger to issue and manage a CBDC. The country wants to bridge the financial inclusion gap with the planned CBDC. The apex bank’s plan is to increase financial inclusion in the country by 85% by 2023 by making payments with a central bank digital currency (CBDC), faster and easier.
“Beyond privacy, the CBDC solution is also custom-designed to handle payments at the volume of transactions required by a successful retail CBDC. This provides central banks like the RMA with the security, control, and flexibility they need to deploy a CBDC without compromising financial stability or monetary policy objectives”, Ripple said about its private ledger product.
Talking about CBDCs, the Central Bank of Nigeria is a week away from launching its e-naira.