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- Bhutan Monetary Authority all set to taste CBDC with Ripple
- RMA to improve cross-border payments, boost financial inclusion for its citizens, and stretch its commitment to sustainability
- Bhutan to improve financial inclusion in the country by 85 percent by 2023
Bhutan’s Royal Monetary Authority is teaming up with Ripple to test a central bank digital currency in the Himalayan monarchy.
Bhutan’s central bank will use Ripple Labs’ private ledger to issue and administer a digital ngultrum, according to the release. The Royal Monetary Authority, or RMA, was reportedly driven by a desire to improve cross-border payments, boost financial inclusion for its citizens, and stretch its commitment to sustainability as the world’s only carbon-negative country, according to Ripple.
Improving on financial inclusion
Bhutan’s Gross domestic product was $2.5 billion in 2020, with a population of around 800,000. Thousands of Bhutanese individuals do not have access to a savings account or a credit card, despite several news outlets reporting on the country’s gross national happiness as an alternative to traditional finance. The RMA claims that by making payments with a central bank digital currency, or CBDC, easier, faster, and more inexpensive, it expects to improve financial inclusion in the country by 85 percent by 2023.
In addition to privacy, the CBDC solution is specially engineered to handle payments at the number of transactions necessary by a successful retail CBDC, Ripple explained. This gives central banks like the RMA the protection, control, and flexibility they need to implement a CBDC without jeopardising financial stability or monetary policy goals.
Experiencing the pilot project
More than six months ago, Ripple announced that it will be piloting a private version of the XRP Ledger to give central banks a way to create a CBDC. Bhutan is among the first countries to use this service.
Other CBDC trials are continuing around the world, with Indian officials indicating that a digital rupee may be launched in December and Nigeria’s central bank preparing to establish a digital currency by 2022. China, meanwhile, appears to be leading the way, having started testing its digital yuan in April 2020.
Other countries following suit
According to reports, the Bank of Ghana (BoG) is considering launching a central bank digital currency (CBDC) experiment.
Ernest Addison, the governor of Ghana’s central bank, stated that the BoG was in the advanced stages of constructing a CBDC during a news conference in Accra on Monday.
The final stage, according to the governor of the Bank of Ghana, will include a pilot study to resolve questions of feasibility before the CBDC goes into nationwide circulation.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
