Ripple, the provider of enterprise blockchain and crypto solutions for cross-border payments, today announced a collaboration with Bhutan’s central bank, the Royal Monetary Authority (RMA), to pilot a central bank digital currency (CBDC) using Ripple’s CBDC Private Ledger.
Building atop its current payments infrastructure, the RMA will pilot retail, cross-border and wholesale payment use cases for a digital Ngultrum in phases using Ripple’s sustainable blockchain technology. Doing so will help accelerate its mission to increase financial inclusion in Bhutan to 85% by 2023.
“Our collaboration with Ripple is testament to the potential of CBDCs to provide an alternative and sustainable digital payment instrument in Bhutan. Ripple’s technology will allow for the experimentation of a CBDC with our existing payments infrastructure, while ensuring cost-effective cross-border transfers.”
– Yangchen Tshogyel, Deputy Governor of the RMA
RMA’s commitment to developing a secure and robust payments system has cemented it as a leader in financial innovation. In 2019, the central bank launched the Global Interchange for Financial Transactions (GIFT) system which enables electronic transfer of large value and bulk payments. It also complements the government’s Electronic Public Expenditure Management System (e-PEMS) to streamline transactions with the government and banking systems.
Bhutan shares Ripple’s pledge to sustainability as one of the only carbon-negative countries in the world. The CBDC Private Ledger—based on the public, open-source XRP Ledger—is carbon neutral and 120,000x more efficient than proof-of-work blockchains. Further, 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.
“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. In addition to providing the full lifecycle of CBDC requirements, Ripple’s solution offers central banks the superior functionality and interoperability needed to implement global cross-border CBDC payments.”
– James Wallis, VP of Central Bank Engagements at Ripple
With Ripple’s CBDC Private Ledger, central banks will be able to access a network of CBDC Ledgers that enables full settlement interoperability, while ensuring monetary and technological independence.
Royal Monetary Authority of Bhutan
Royal Monetary Authority of Bhutan (RMA) was established in 1982 by the 56th session of the National Assembly to take over the issue of the national currency, the management of the external reserves, and foreign exchange operations.
The Authority assumes the role of government banker, holding the bulk of government deposits and providing finance through licensure, regulation, and supervision of financial institutions of Bhutan.
With the enactment of the RMA Act (2010), the status of the RMA has been elevated to an autonomous Central Bank with greater powers in terms of its mode of functioning and decision-making process.