Bhutan partners with Ripple to test digital Ngultrum on a private ledger –

The central bank of Bhutan, the Royal Monetary Authority (RMA), has partnered with Ripple to begin testing a model of its central bank digital currency (CBDC) using Ripple’s technology. The test will use Ripple’s own CBDC private ledger to support similar use cases. The pilot test will include retail, cross-border and wholesale payments for the proposed CBDC.

Bhutan concerns Ripple in CBDC pilot test

Bhutan, a small country in southern Asia, is working on issuing a central bank digital currency of its fiat currency, known as Ngultrum. The nation will partnership with Ripple, the cryptocurrency and payments company, to test the digital currency in various use cases. The Royal Monetary Authority (RMA), Bhutan’s central bank, will use Ripple’s technology for testing.

This pilot is another example of a country approaching the world of digital currencies to improve citizens' access to financial services. In this context, Bhutan expects that these measures will improve its citizenship's financial market accessibility by 85% by 2023.

Yangchen Tshogyel, deputy governor of the Royal Monetary Authority of Bhutan, said they chose Ripple because it allows them to use their existing infrastructure. Tshogyel said:

Ripple’s groundbreaking technology will enable the experimentation of a CBDC with our existing payments infrastructure – while ensuring efficient and cost-effective cross-border transfers.

Ripple and CBDCs

While Ripple has been touted as the go-to source for remittances and banking-related applications – and even as a sort of SWIFT replacement – ​​this is the first time it has been involved in testing a CBDC. However, this test does not use Ripple’s public ledger. The test uses another one from Ripple technology called CBDC Private Ledger, which was launched by the company in March.

The private ledger is powered by Ripple's own consensus, which is based on proof-of-stake and, according to the company, supports tens of thousands of operations per second with negligible fees, suitable for massive payment transactions. James Wallis, VP of Central Bank Engagements at Ripple, explained:

We couldn't be more excited to partner with the RMA on its CBDC agenda and promote our shared values ​​to create a more sustainable, accessible and financially inclusive reality.

Bhutan now joins other geopolitical regions like China and the EU in actively researching central bank digital currencies for implementation.

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