Looking to explore the use cases of blockchain technology, Banco de la República, Colombia’s Central Bank, has chosen to partner with Ripple, the blockchain and crypto solutions provider.
Historically, blockchain has solely been associated with Bitcoin and cryptocurrencies. However, as recently discussed at The Fintech Times, blockchain technology has numerous use cases; ranging from crypto infrastructure to creating a network for sustainable tuk-tuks. Looking to explore use cases closer to crypto, Banco de la República has expressed interest in a central bank digital currency (CBDC) for Colombia.
Working in tandem with Ripple and The Ministry for the Information and Communications Technologies (MinTIC), the Colombian central bank will be enhancing Colombia’s high-value payment system using Ripple’s CBDC Platform, powered by the XRP Ledger (XRPL). The XRPL is an energy-efficient and open-source blockchain. This will be the third phase of blockchain experimentation led by MinTIC.
Financial institutions continue to prioritise financial education and MinTIC is no different. Under the guidance of the Directorate of Digital Government, the pilot project with Ripple will run to the end of 2023. During this time, MinTIC will educate national and public entities through interactive and collaborative real-world application experiments.
These will look to test the blockchain’s speed, scalability and transparency when it comes to revolutionising the payments and data management markets. Ripple will experiment and test its CBDC platform in a controlled environment, ensuring the integrity of public resources.
Looking towards a CBDC-filled future
Highlighting the significance of this project, Minister Mauricio Lizcano, ICT Minister, emphasised: “Potential efficiencies can be evaluated through the results obtained in the development of a solution with blockchain technology. In turn, this 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). This solution will allow simulations of different use cases in the high-value payment system.”
“The Banco de la República in Colombia and MinTIC forward-thinking on blockchain innovation will unlock new ways organisations operate in the digital era,” said James Wallis, VP of Central Bank Engagements and CBDCs.
“By harnessing the power of the CBDC Platform, based upon the XRPL, this project will pave the way for transformative advancements in the utilisation of blockchain technology within the public sector. This partnership showcases our commitment to driving innovation and efficiency. Ultimately, it empowers public entities to unlock the full potential of secure and transparent transactions.”
Ferran Prat, CEO of Peersyst Technology has also highlighted: “Our partnership with MinTIC as a reference technology firm for the implementation of Blockchain technology in Latin America requires us the most demanding criteria when selecting technologies. In the case of payments and technology for central banks, Ripple is a benchmark leader in the industry and one of the best allies to apply the potential of its large-value
payment system’s technology at Banco de la República.”