- Ripple announces a partnership with the central bank of Bhutan – the Royal Monetary Authority (RMA).
- The RMA plans to issue a CBDC using Ripple’s open-source XRP Ledger (XRPL).
- The announcement is a step forward for Ripple that has been fighting a legal battle with the SEC.
Ripple Labs Inc, a financial technology company headquartered in the U.S., yesterday announced a partnership with the Royal Monetary Authority (RMA) – the central bank of Bhutan. According to the announcement, Bhutan will utilize Ripple’s solution to issue a central bank digital currency (CBDC), the digital Ngultrum.
Ripple disclosed that the move is driven by the country’s desire to enhance digital and cross-border payments, expand financial inclusion efforts and extend its commitment to sustainability.
The country will use Ripple’s solution to pilot a central bank digital currency in different phases. The CBDC solution of Ripple leverages a private version of the public, open-source XRP Ledger (XRPL). Like the public XRP Ledger, moving money through Ripple’s CBDC solution is billed to be cost-effective, reliable, and nearly instantaneous. Ripple first announced opening up its XRPL ledger for use by interested central banks in March after it recognized the potential business possible to it due to the growing interest of countries in CBDCs.
According to Ripple, the core technology of the ledger has been proven to have the potential to provide Central Banks a secure, controlled, and flexible solution for the issuance and management of digital currencies as over 5,400 third-party tokens have been issued and traded on it. Building on top of that technology will ensure that central banks have greater control over their CBDC than they would get with public blockchains.
All things considered, the partnership is a step forward for Ripple and its embattled cryptocurrency XRP. Ripple’s XRP has struggled to gain traction in the market despite being the sixth-largest cryptocurrency by market cap since it was dragged into a lawsuit by the U.S. Securities and Exchange Commission. XRP is a far cry from its all-time high of around $3 reached in 2018. However, following the announcement, XRP has jumped 6.01% in the last 24 hours and is now trading at circa $1.
Recently, the SEC lawsuit against Ripple has also been looking like it is going in the company’s favor. Many cryptocurrency market observers have noted that Ripple has an upper hand in the case going by their defense that the SEC did not provide clarity or fair notice to the company before taking enforcement actions against it.
For a lot of analysts including Attorney Jeremy Hogan, a regular commentator on the proceedings of the trial, the SEC’s case is sizzling out and Ripple is likely to win. Notably, Ripple’s legal team seems to feel their case has a stronger argument as they have revealed that they are not considering a settlement. When this happens, it could potentially position XRP for a massive price breakout in the long term.