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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.
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