We are proud to announce today our partnership with Bhutan’s central bank, the Royal Monetary Authority (RMA), which will use Ripple’s CBDC solution to gradually pilot a central bank digital currency (CBDC). This move is being driven by the country’s desire to improve digital and cross-border payments, expand financial inclusion efforts and expand its commitment to sustainability as the only carbon negative country in the world.
Financial innovation to support inclusion
In recent years, RMA has established itself as a leader in financial innovation. Building on the country’s payment infrastructure and capabilities, this new initiative will leverage our CBDC solution to support seamless retail, cross-border and wholesale payment use cases for a digital ngultrum.
The RMA believes that making payments easier, faster, and cheaper, both domestically and internationally, will help them meet their goal of increasing financial inclusion by 85% by 2023. The power of the technology underlying the XRP Ledger combined with Ripple’s experience in marginal payments and tokenization, using enormous speed, cost and innovation advantages to support this mission.
A sustainable CBDC
In addition to the technology, Ripple’s commitment to sustainability was also important to Bhutan. The CBDC solution is climate-neutral and, since it is based on the public XRP ledger, 120,000 times more energy-efficient than proof-of-work blockchains.
For a country that has pledged to remain climate neutral, this combination of innovative financing and sustainability is a natural addition.
A private ledger for central banks
Ripple’s CBDC solution leverages a private version of the open source public XRP ledger (XRPL). The core technology has proven itself with more than 5,400 different third-party tokens issued and traded so far on the XRPL via the integrated decentralized exchange (DEX) and custom token functionality. Building on this technology, Ripple’s CBDC solution ensures that central banks have greater control over issuance, administration, data protection and validation than would be possible with public blockchains.
In addition to data protection, the CBDC solution is also tailor-made to process payments with the transaction volume required by a successful CBDC for retail business. This gives central banks like the RMA the security, control, and flexibility they need to deploy a CBDC without compromising financial stability or monetary policy objectives.
As with the public XRP ledger, transferring funds through Ripple’s CBDC solution is inexpensive, reliable, and almost instantaneous. In addition, the solution will enable the RMA to ultimately access a network of CBDC ledgers to ensure full settlement interoperability while maintaining monetary and technological independence.
To learn more about Ripple’s solution for CBDCs, contact us at firstname.lastname@example.org.