The Royal Monetary Authority of Bhutan is reportedly forming an alliance with Ripple, to carry out the pilot for a central bank digital currency in the mountainous nation. 

Specifically, Ripple Labs reportedly revealed that Bhutan’s central bank is looking to utilize the firm’s private ledger, to conduct the issuance and management of a digital ngultrum. 

Per Ripple, the motivation fueling the initiative was from the attempts from the Royal Monetary Authority (RMA) to enhance cross-border payments, widening the scope of financial inclusion for its residents, as well as “extending its commitment to sustainability as the only carbon-negative country in the world”. 

The RMA reportedly disclosed that it is looking to amplify financial inclusion nationwide by 85% by 2023, by increasing the speed, simplicity, and affordability of a central bank digital currency (CBDC). 

“Beyond privacy, the CBDC solution is also custom-designed to handle payments at the volume of transactions required by a successful retail CBDC. 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.” Ripple additionally remarked. 

The development reportedly surfaced half a year later, following a Ripple initiative to conduct the piloting phase of a private version of the XRP Ledger, to offer central banks a solution to introduce CBDC. 

Bhutan was reportedly among one of the leading nations to make themselves available to this initiative. 

CBDC pilots are being carried out across the globe at the moment, with the authorities in India hinting at an introduction of a digital rupee in December this year, while Nigeria’s central bank has plans to release a digital currency by 2022.