Ripple to Help Colombia’s Central Bank Explore CBDC Use Cases

Blockchain payment company Ripple Labs Inc has entered a strategic partnership deal with Colombia’s Central Bank Banco de la República and together, they intend to explore blockchain technology use cases featuring Central Bank Digital Currency (CBDC). 

Notably, the partnership involves the Ministry of Information and Communications Technologies (MinTIC) and a specialized blockchain technology firm known as Peersyst Technology. 

According to a Twitter post by Peersyst, the objective of the alliance is to evaluate the potential efficiencies of a solution using the newly launched Ripple CBDC Platform based on the core technology of the XRPLedger (XRPL) to improve use cases on the high-value payment system. Hence, this pilot phase would be developed as part of the third phase of blockchain experimentation led by MinTIC.

In its entirety, this third phase is focused on sensitising both national and territorial public entities on how payment systems and data management can be revolutionized using blockchain technology’s speed, scalability, and transparency. 

The sensitization process will be carried out through interactive and collaborative real-world application experiments. Also, Ripple’s CBDC Platform will be tested in a controlled environment which does not jeopardize public resources.

Ripple and Colombia Collaboration: The Significance

Attempting to explain the significance of the project, Minister Mauricio Lizcano, ICT Minister noted that “potential efficiencies can be evaluated through the results obtained in the development of a solution with blockchain technology, which manages to improve and complement the processes in the entities in a safe and efficient way. In addition, it will provide a technological solution (Prototype), which will allow simulations of different use cases in the high-value payment system.”

James Wallis, the Vice President of Central Bank Engagements and CBDCs also believes that this forward-thinking approach of the Colombia Central Bank and MinTIC will be the birth of an era of innovativeness in the digital space. 

Per his statement, onboarding the Ripple CBDC Platform based on the XRPL will make way for transformative advancement in the use of blockchain technology in the public sector. The partnership highlights the growing recognition of Ripple and the firm’s efforts to be a dominant goto Web3 firm among Central Banks building their own CBDCs