US-based blockchain company Ripple appears to have scored a coup in the central bank digital currency (CBDC) sector, with the mountainous Asian kingdom of Bhutan enlisting the XRP-affiliated firm to help it pilot a digital currency.
Ripple claimed that it had partnered with the Royal Monetary Authority of Bhutan (RMA), the nation’s central bank, in a deal that would see the latter “use Ripple’s CBDC solution to pilot a digital ngultrum.”
The firm added that the project would help Bhutan “enhance digital and cross-border payments,” as well as “expand financial inclusion efforts and extend its commitment to sustainability.”
The project will be “based on” technology used by the XRP Ledger network, and, in a post on its website, Ripple claimed:
“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.”
This, the American firm claimed, would help “support” the RMA’s “mission” of enabling “easier, faster and more affordable payments, both domestically and internationally,” and boost “financial inclusion by 85% by 2023.”
Ripple explained that its CBDC solution “leverages a private version of the public, open-source XRP Ledger,” and “ensures central banks have greater control over issuance, management, privacy and validation than they would get” using public blockchain networks.
The news comes as a boost for Ripple, which already has a strong foothold in Asia, thanks in no small part to its partnership with Japan’s financial giant SBI. The two firms co-run a private sector-focused, continent-wide cross-border payments operator named SBI Ripple Asia.
But Ripple appears to want a piece of the CBDC action, too.
Central banks all across Asia are now scrambling to get CBDC projects online. And while the continent’s larger economies are happy to let their central banks handle the projects, others have instead turned to private sector partners. These include the like of Cambodia, which partnered with a Japanese firm to launch one of the world’s first-ever CBDCs last year.
In November last year, Ripple posted a job ad for a CBDC-related role – a Senior Director for Central Bank Engagements.
Also in 2020, David Schwartz, Ripple’s Chief Technology Officer noted that XRP-related solutions would likely be of use in CBDC distribution-related programs, noting:
“XRP and the XRP Ledger were built specifically for this kind of role.”
And in March this year, Ripple revealed that it was piloting a “private ledger for central banks launching CBDCs.”
On its website, Ripple claimed that its private ledger was “based on the same blockchain technology that powers the XRP Ledger”, so was “built for payments.”
The firm also noted that it would harness its payment network RippleNet technologies to “enable ultra-high throughput use-cases such as micro-payments.”
At 11:10 UTC, XRP trades at USD 0.989 and is up by 6% in a day, trimming its weekly losses to less than 12%.
Source: Cryptonews
