Fintech company Ripple has teamed up with Bhutan's central bank to help it test the national digital currency, Capital.com has reported.
The Royal Monetary Authority of Bhutan will use a proprietary version of Ripple's distributed ledger created specifically for central bank digital currencies (CBDCs). It will test retail, cross-border and large payments using the digital version of Bhutan's ngultrum.
Bhutan intends to provide access to financial services to 85% of the population by 2023. In 2019, this share stood at 67.6%.
Ripple's private ledger uses a modified version of XRP's public ledger and, according to a press release, is 120,000 times more efficient than blockchains based on the proof-of-work consensus algorithm. The company cites zero carbon footprint, flexibility and control as its key benefits without compromising financial stability and monetary targets. The Royal Monetary Board has said:
"Our partnership with Ripple is a testament to the ability of CBDCs to provide an alternative and sustainable tool for digital payments in Bhutan."