The collaboration between Ripple Labs Inc. and the Central Bank of Bhutan to create a Digital Ngultrum will enter the pilot phase in 2024.
The plan for this next phase was detailed in a Policy Brief detailing the key agenda to transform the Bhutanese economy into a vibrant and self-sustaining one.
With the Central Bank Digital Currency (CBDC) or Digital Ngultrum a key part of its plans, the apex bank is optimistic the alternative currency can truly make a difference to the average Bhutanese.
Bhutan CBDC: Key Timeline to Watch
The Bhutan CBDC project started as early as 2021, with Ripple Labs playing a frontline role. So much has been achieved since the project was commissioned, with three distinct phases completed from 2021 to date.
Ripple and the Bhutan Central Bank have carried out a needs assessment to highlight how a Digital Ngultrum will benefit the masses. After completing this needs assessment phase, the project went on to carry out the CBDC design and scoping, after which it then carried out the “technical design and proof of concept.”
With Ripple playing a frontline role every step of the way, the project is now slated for Pilot implementation starting next year. This next phase is bound to progress until 2026, according to the schedule of events in the Policy paper.
The goals for this pilot phase and the entire Bhutanese CBDC push are summarized in determining how a Digital Ngultrum is deployed and integrated into existing financial infrastructures in the country.
Having developed the technology to facilitate both retail and wholesale CBDCs, Ripple Labs’ solutions will enable the transition of these systems and further bolster the drive toward financial inclusion.
CBDC Race Might Heat Up Soon
According to the International Monetary Fund (IMF), at least 100 countries are actively researching or developing CBDC in one form or another.
While different countries have unique reasons for developing their own digital money, the need to quickly update their financial infrastructures and not lag may heat the push for CBDCs in the coming year.
While countries are still deciding whether or not to launch CBDCs, players like Ripple Labs and Mastercard are already a step ahead in researching innovative ways to power the interconnection between these CBDCs for cross-border payments when they eventually go live.
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