Bhutan Adopts Ripple’s CBDC Solution to Enhance Financial Inclusion and Sustainability

Bhutan’s central bank the Royal Monetary Authority (RMA) will leverage Ripple’s central bank digital currency (CBDC) solution to pilot a CBDC in phases, and to support seamless retail, cross-border and wholesale payment use cases for a digital Ngultrum. Ripple is the only blockchain company today with products in commercial use, providing one frictionless experience to send money globally.

The partnership is driven by Bhutan’s desire to enhance digital and cross-border payments, expand financial inclusion efforts and extend its commitment to sustainability as the only carbon-negative country in the world. The 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.

Ripple’s CBDC solution leverages a private version of the public, open-source XRP Ledger (XRPL), ensuring central banks have greater control over issuance, management, privacy, and validation than they would get with public blockchains. Besides, it provides central banks with the security, control and flexibility they need to deploy a CBDC without compromising financial stability or monetary policy objectives. 

Like the public XRPL, moving money through Ripple’s CBDC solution is cost-effective, reliable and nearly instantaneous. In addition, the solution will enable the RMA to eventually access a network of CBDC ledgers for full settlement interoperability, while still maintaining monetary and technological independence. 

In addition to the technology, Ripple’s commitment to sustainability is important for Bhutan. The CBDC solution is carbon-neutral and, because it’s based on the public XRPL, and 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.