The Banco de la Republica, Colombia’s Central Bank, has announced a partnership with Ripple as it looks to explore the use of blockchain technology in the country.
Colombia will conduct a pilot project to test Ripple’s CBDC platform for its high-value payments system. The country already uses Ripple’s technology for land distribution efforts being undertaken.
Colombia’s Central Bank Announces Ripple Partnership. The Banco De La Republica And Ripple Partnership
Colombia's Central Bank will conduct a pilot for Ripple's CBDC platform in partnership with the Ministry for the Information and Communications Technologies. The initiative is part of a larger blockchain experimentation phase. Ripple's CBDC platform will be experimented with and tested in a controlled environment without risking public resources. Colombia’s Central Bank Announces Ripple Partnership
“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.”
The vice president of Central Bank Engagements and CBDCs at Ripple, James Wallis, added that he believed the project could clear a path for significant transformative advancements regarding the use of blockchain technology in the public sector.
“By harnessing the power of the CBDC Platform, based upon the XRPL, this project will pave the way for transformative advancements in the utilization of blockchain technology within the public sector.”
However, the announcement did not disclose when Colombia plans to launch its own central bank digital currency.
CBDCs Picking Up Steam
A CBDC is a digital version of a country's fiat currency, backed by the central bank and controlled by a centralized entity. Unlike cryptocurrencies such as Bitcoin and Ethereum, CBDCs are not decentralized. According to the Atlantic Council, 11 countries have launched their own CBDCs, 18 are in the pilot stage, and 32 are in the development stage.
Colombia And Ripple Have Partnered Before
Colombia and Ripple have partnered before to improve the government's land distribution efforts by storing and authenticating property titles on Ripple's blockchain. This initiative aimed to eliminate bureaucratic procedures and promote equal land distribution. Ripple was created to help banks and financial institutions move funds faster and without extra fees. XRP is currently the 6th largest cryptocurrency in the world.
Colombia’s Pro-Crypto Stance
Colombia's president, Gustavo Petro, is a strong supporter of Bitcoin and has taken a proactive approach towards cryptocurrencies. He has made several pro-Bitcoin statements and believes in the power of digital assets..
“Bitcoin removes the power of issuance from the states and the seigniorage of the currency from the banks. It is a community currency that is based on the trust of those who carry out transactions with it. Since it is based on the blockchain, trust is measured and grows, hence its strength.”
Colombia is taking steps towards adopting cryptocurrencies and blockchain technology. The government launched a digital currency initiative in partnership with the central bank, following the lead of Venezuela and El Salvador. Binance announced it will launch its prepaid crypto card in Colombia in March 2023, allowing users to pay with crypto instead of traditional debit or credit cards.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.