update 24 September 2021

Central Bank of Bhutan Partners with Ripple Ahead of CBDC Trials

As per Nikkei reports, the Royal Monetary Authority of Bhutan partners with Ripple for its CBDC trials. The main aim is to integrate Ripple’s XRP blockchain into Bhutan’s payment infrastructure to improve P2P transactions and international remittances.

Central Bank of Bhutan and Ripple

As per Japanese news company Nikkei, the San Francisco-based company Ripple will work with Bhutan’s Central Bank to try their CBDC. The main aim of this collaboration is to see to it that the CBDC will have flawless international remittances and P2P transactions.

Ripple’s CEO Brad Garlinghouse says that his company dreams of developing CBDCs that could easily interact with each other. He made this report in April this year at the Ripple conference. However, these plans seem to have been underway since Tashi Yezer, the director of payment systems of the Central Bank of Bhutan, was in attendance.

Building on Future Plans

This year, Ripple announced its private version of the XRP ledger in March. The report explained that it would host CBDCs with instant energy-efficient and very reliable features. 

The CTO of Ripple, David Schwartz, introduced the concept behind federated sidechains on the XRP ledger to help central banks develop CBDCs.In addition to the CBDCs supporting feature, Ripple has also published a whitepaper entitled ‘The Future of CBDCs.’ The whitepaper discusses the framework for developing CBDCs and offers guidance for achieving global interoperability.

As per Asheesh Birla, Ripple had a long discussion with central banks in a push to propose CBDCs. This company claims that despite its saga with the SEC, its ties continue to thrive outside the U.S.

How CBDCs Will Affect the Crypto World

The development of CBDCs will have a direct effect on the crypto world in a significant way. These CBDCs will assure many that digital currency is safe since no government would willingly jeopardize its economy. About 14 countries have implemented CBDCs, but they are only fully operational in five countries. 

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Major countries like China and Sweden have already embarked on developing digital currencies for their Central Banks. The PBOC published a white paper for its digital yuan on 16 July 2021. As per Bloomberg, Riksbank Governor Stefan Ingves said that Sweden would also have a CBDC in about five years. The move is a significant step towards federal crypto adoption.