The pilot project will show whether Ripple’s new end-to-end CBDC platform could help boost Colombia’s high-value payment system
Banco de la República, the central banking institution of Columbia, in conjunction with the Ministry of Information and Communications Technologies (MinTIC), will pilot the new Ripple CBDC platform through the rest of the year.
The initiative is part of a blockchain experimentation phase conducted by the Ministry. The functions of Ripple’s CBDC platform as applicable to Colombia’s high-value payment system “will be experimented and tested in a controlled environment without compromising public resources.” The experiment is expected to last at least till the end of the year.
Colombia’s government earlier said it was considering the introduction of a central bank digital currency (CBDC) to facilitate transactions and reduce tax evasion. Moreover, the country is looking at CBDC as a way to transit to cashless economy. For instance, it may eventually ban high-value cash transactions in amounts surpassing 10 million Colombian pesos ($2390).
The new Ripple CBDC platform is powered by the XRP Ledger, an energy-efficient and open-source blockchain. It was developed to address multiple use cases including wholesale and retail CBDCs on a private ledger or issuing stablecoins. It can serve central banks, other financial institutions, and governments.
The platform features registry technology, the issuer’s capabilities for minting, distributing, redeeming, and destroying tokens, interdepartmental settlement and distribution functions, and end-user wallets.
The innovative capabilities of the platform, according to James Wallis, vice president of the firm for interaction with central banks and CBDC, will help to provide instant settlement of both domestic and cross-border payments with the reduced risk levels. Another advantage is to improve the user experience of sending and receiving digital currency from both sides of the corresponding process.
In the context of relevant CBDC and stablecoin testing activities, the company cooperates with the Republic of Palau, the Central Bank of Montenegro, and the Royal Monetary Authority of Bhutan.
Recently, SEC vs Ripple Case attained even more significance for the industry amid the regulator’s crackdown on major crypto exchanges.