Bhutan to pilot a central bank digital currency (CBDC) project with Ripple

Email

In a recent press release by the Royal Monetary Authority of Bhutan (RMA), Bhutan will be collaborating with Ripple Labs, Inc. to pilot a project on central bank digital currency (CBDC).

CBDC is a digital form of fiat currency issued by a central bank. As central banks the world over continue to explore CBDCs, Bhutan understands the need to adapt to the overall digital transformation in the way we live, interact and transact with each other. Since cash is the only form of central bank money available to the general public, retail CBDCs provide a digital alternative to the public in the face of declining usage and acceptance of cash.

The move was driven by the nation's desire to enhance digital and cross-border payments, expand financial inclusion efforts and extend its commitment to sustainability as the world's only carbon-negative country. 

It is timely that the RMA explore a digital alternative to its money, a digital Ngultrum, that promotes efficiency and innovation within the overall context of the country's drive to harness technology for a 21st century Bhutan.

Building atop its current infrastructure, the RMA will pilot retail, cross-border and wholesale payment use cases for a digital Ngultrum using Ripple's sustainable blockchain technology, which will be tested in trial phase with the banks, payment service providers and other relevant stakeholders.

RMA believes that easier, faster and more affordable payments, both domestically and internationally, will help it reach its goal of increasing financial inclusion by 85% by 2023.  Currently, thousands of Bhutanese citizens do not have access to a savings account or credit card. 

The power of the technology underlying the XRP Ledger, combined with Ripple’s experience in cross-border payments and tokenization, will harness tremendous speed, cost and innovation advantages in support of this mission. 

In addition to the technology, Ripple’s commitment to sustainability was important for Bhutan. The CBDC solution is carbon-neutral because it’s based on the public XRP Ledger, it is 120,000x more energy-efficient than proof-of-work blockchains. 

For a country that has pledged to remain carbon neutral, this combination of innovative finance with sustainability is a natural fit. 

“Beyond privacy, the CBDC solution is also custom-designed to handle payments at the volume of transactions required by a successful retail CBDC,” said Ripple. “This provides central banks like the RMA with the security, control and flexibility they need to deploy a CBDC without compromising financial stability or monetary policy objectives.”

The announcement comes more than six months after Ripple said it would be piloting a private version of its public, open-source XRP Ledger to provide central banks with a solution to launch a CBDC. Bhutan is one of the first countries to be part of this service.

Which Countries Are Going Cashless?

In March this year, China was the first country to announce that it would be piloting a CBDC. There are other central banks from different countries which are testing a CBDC to issue into public circulation including Sweden, The Bahamas, France, The Philipines, Japan, Turkey, and Switzerland. To date, more than 80 countries are exploring a CBDC.



Related Posts

Bhutan Strives to Keep Up With 4th Industrial Revolution through...

The pandemic has affected the tourism industry globally including Bhutan. The stakeholders involved in the tourism...

Jan 12, 2021 00:38

Historical 112th National Day

National Day (Gyalyong Duechen) in Bhutan is the most significant national event that is widely celebrated throughout...

Dec 19, 2019 13:11

Colours Beyond the Wall Volume II: Reformation through Art

‘Do you see the eyes?’ ‘Look closely and you would see the eyes with tears streaming down. And this is the nose,’ Kinga...

Apr 26, 2022 22:01

Travel to Bhutan: go off the beaten path in eastern Bhutan

You will find settlements on high grounds and isolated valleys. You will see rolling hills, deep gorges, and green...

Mar 28, 2022 15:44

Bhutan is on a mission to plant one million fruit trees

Inspired by His Majesty’s vision, one million fruit trees are expected to be planted in two and half months in Bhutan...

Mar 16, 2022 14:48

Electric vehicles are Bhutan’s answer to air pollution

Air pollution by vehicles is a threat to Bhutan’s carbon-neutral status. But the Bhutanese have found a solution.

Feb 28, 2022 12:13

Latest

News

Colours Beyond the Wall Volume II: Reformation through Art

‘Do you see the eyes?’ ‘Look closely and you would see the eyes with tears streaming down. And this is the nose,’ Kinga (name changed) said...

Apr 26, 2022 22:01

Travel to Bhutan: go off the beaten path in eastern Bhutan

You will find settlements on high grounds and isolated valleys. You will see rolling hills, deep gorges, and green pastures.

Mar 28, 2022 15:44

Features

What went on at Miss Bhutan 2022 preliminary competition

The 3rd edition of Miss Bhutan is underway and the Preliminary Round was held and broadcast live on BBS Channel 2 on 15th May 2022 from...

May 19, 2022 21:11

Check out Drunken Yeti Bar for the best cocktails in Thimphu

Named after a mythical Himalayan creature and perched on top of a distinct and unique 3-storied building in Thimphu, lies a unique bar that...

May 17, 2022 21:11

Business

The enormous role of hydropower in Bhutan

Bhutan uses hydropower to conserve the environment, produce electricity, and achieve economic self-reliance.

Jan 25, 2022 11:43

Online businesses are becoming more and more popular in Bhutan

Even though the Internet was developed in the 1960s, the tiny Himalayan Kingdom of Bhutan was only introduced to it in June 1999.

Jan 20, 2022 12:41

Sports

Outstanding individuals, schools and clubs awarded for their contributions to grassroots football

On December 22, 2021, the Bhutan Football Federation (BFF), a bronze member of the AFC Grassroots Charter,presented awards to unsung heroes...

Jan 11, 2022 14:15

Bhutan's national women cricket team won ICC Women's T20 World Cup Asia Qualifier 2021 opening match

The United Arab Emirates is currently hosting the ICC Women's T20 World Cup Asia Qualifier. The two ICC Academy grounds in Dubai Sports City...

Nov 23, 2021 11:13

Travel

Trace the footsteps of the Divine Madman on this hiking trail

There is no better way to connect spiritually with Drukpa Kuenley, the “Divine Madman”. The trail will take you downhill for about four...

Apr 28, 2022 22:30

Been to Bhutan before? Stand a chance to win FREE flight tickets to back to Bhutan!

If you’ve been to Bhutan before, we want to hear your story.

Apr 15, 2022 19:49

Lifestyle

The hot springs of Bhutan are believed to have miraculous healing properties

The Bhutanese believe that hot springs are a blessing from the Buddha.

Apr 08, 2022 21:52

What are the five main fruits in a Bhutanese fruit bowl 'thokay'?

There are usually five fruits that make it to the 'thokay' (fruit bowl) placed on the altars or in front of the King, Chief Abbot and Lamas.

Mar 08, 2022 15:54

COVID-19

A detailed summary of Bhutan's COVID-19 management and plans moving forward

With offices and all businesses open, movement of vehicles allowed and critical services resumed from 21st March 2022, Bhutan braces for a...

Mar 22, 2022 11:23

Vaccinated tourists to undergo 5-day quarantine in Bhutan from April 25

What you need to know about entering Bhutan from April 25.

Mar 14, 2022 14:21

Subscribe to our newsletter

Never miss out on new happenings and news stories!

Download Daily Bhutan Mobile App

Connecting with us just got easier!