CBDC Latest: Colombia to Test Ripple CBDC Platform; BIS and Bank of England Complete Pilot

It has been quite a busy week in Central Bank Digtial Currency (CBDC) development around the world. Let’s devle into some of the main CBDC news stories from the past seven days.

Colombia to Test Ripple’s CBDC Platform

Earlier this week the Central Bank of Colombia, Banco de la República, announced that it would be launching a CBDC pilot project to test Ripple’s new end-to-end CBDC platform.

The Ripple platform, powered by the XRP Ledger, offers multiple use cases for wholesale and retail CBDCs. By exploring the potential of Ripple’s CBDC platform, Colombia aims to enhance its high-value payment system and leverage blockchain technology within the public sector.

This is not the first time the Colombian Government has used the XRP Ledger. Last year, Colombia launched a land registery on the open source and enery efficient blockchain.

Bank of England (BoE) and Bank of International Settlements’ (BIS) Joint Pilot Project

A collaborative pilot project between the Bank of England (BoE) and the Bank of International Settlements (BIS) called Project also concluded this week.

The project focused on developing a universal and extensible API layer to connect central bank and private sector infrastructures for retail CBDC payments. Through the project, 33 API functionalities were developed and examined in 30 retail CBDC use cases, including peer-to-peer transfers, retail payments, and small-value business transactions. The success of Project Rosalind highlights the potential for simple and standardized API functionalities to support diverse CBDC use cases.

Bank of Thailand Launch Retail CBDC Pilot Project

Also this week the Bank of Thailand announced that they would launch a CBDC pilot this month.

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The Bank of Thailand said it will collaborate with three payment providers, Bank of Ayudhya (Krungsri), Siam Commercial Bank, and 2C2P. The pilot will involve up to 10,000 users and will continue through August.

Each participating organization has developed an app that includes a wallet and a QR code scanner. The project aims to assess the feasibility and potential benefits of a retail CBDC, including its impact on financial inclusion and the competitiveness of the payment system.

Discussions about Digital Dollar Continue in the US

This week in the US discussions continued regarding the design of the digital dollar. Speaking at he Transform Payments USA 2023 Conference, the Treasury’s Graham Steele discussed a number of issues concerning CBDCs:

• He noted that privacy concerns and institutional trust are important considerations and that a digital dollar would have to be designed to “preserve privacy and anonymity while ensuring transparency and traceability”,
• He also said that a CBDC could potentially destabilize private sector lending through runs into the CBDC.
• Steele also said that offline capabilities would be important to “enhance resiliency and financial inclusion in areas with limited or no internet connectivity”.
• He also emphasized that the US “has not yet determined whether it will pursue a CBDC”.