Financial Crime World

Bhutan Takes Step Towards Financial Inclusion with Blockchain-Powered Digital Currency Pilot

In a move aimed at boosting financial inclusion in the country, the Royal Monetary Authority (RMA) of Bhutan has partnered with cross-border payment firm Ripple to pilot a central bank digital currency (CBDC). This initiative is part of the RMA’s mission to increase the use of digital payments and reach its goal of 85% financial inclusion by 2023.

Partnership Details

The RMA will utilize Ripple’s CBDC private ledger, which enables financial institutions to access a network of CBDC ledgers. This allows for full settlement interoperability while maintaining monetary and technological independence.

Key Benefits of the Partnership

  • Enables retail, wholesale, and cross-border payment use cases for a digital Ngultrum alongside existing payments infrastructure
  • Complements the RMA’s 2019 introduction of the Global Interchange for Financial Transactions system
  • Integrates with the Electronic Public Expenditure Management System to streamline transactions between the government and banks

Global Significance

The partnership builds on Ripple’s efforts to support CBDC development globally, including its recent collaboration with the Central Bank of Nigeria (CBN) to introduce the eNaira.

Quotes from Key Figures

  • “This partnership enables us to test retail, wholesale, and cross-border payment use cases for a digital Ngultrum alongside our existing payments infrastructure.” - Yangchen Tshogyel, Deputy Governor of the RMA
  • “We’re excited to work with the RMA to create a more sustainable, accessible, and financially inclusive reality.” - James Wallis, Vice President of Central Bank Engagement at Ripple

Conclusion

The pilot is seen as a significant step towards promoting financial inclusion in Bhutan, where access to digital payments has been limited in the past. By harnessing the power of blockchain technology, the RMA and Ripple aim to create a more efficient and inclusive payment system that benefits citizens and businesses alike.