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Bhutan Partners with Ripple to launch a CBDC

The Royal Monetary Authority of Bhutan (RAM) is partnering with Ripple to launch a pilot Central Bank Digital Currency (CBDC). According to an article in Cointelegraph, Ripple’s solution would allow the country’s central bank to issue and manage a digital Ngultrum – The Bhutanese currency –  “without compromising financial stability or monetary policy objectives.”

While the Kingdom of Bhutan is best known for its “gross national happiness”, from a financial perspective, a large portion of Bhutanese citizens do not have access to credit cards or savings accounts.

According to the RAM, it plans to increase financial inclusion in the country by 85% by the year 2023 by making payments with a CBDC “easier, faster and more affordable.” By taking advantage of Ripple’s private ledger, it also aims to allow for easier cross-border payments and to “extend its commitment to sustainability as the only carbon-negative country in the world”.

Bhutan is one of the first countries to make use of Ripple’s services to launch a CBDC more than six months after the company announced it would be piloting a private XRP Ledger to provide CBDC solutions.

This move by the Bhutanese RAM comes on the back of several other countries aiming to launch a CBDC; China has seemingly already started trials of a digital Yuan in April of 2020, while Indian officials have hinted at plans to roll out a digital Rupee in December and Nigeria’s central Bank aims to have launched a CBDC by 2022.

Overall, as the technical infrastructure for such solutions is continuously growing and improving, CBDCs are slowly gaining traction among countries worldwide.

At DeFi Consulting Group, we specialize in helping institutions and governments understand and gain access to Crypto Assets and Decentralized Finance. Reach out to our team for guidance on how to effectively approach this space.

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