Collaboration between the Central Bank of Colombia and Ripple for the development of the country’s payment system

While Ripple’s legal situation is still subject to many uncertainties in the United States, the blockchain company is focusing on expanding its activities in other regions. After Europe, Ripple is now targeting Latin America as part of this strategy. A new partnership signed by Ripple in Colombia will use its CBDC platform to pilot use cases aimed at improving the country’s payment system.

Ripple stands out from its competitors when it comes to CBDC

The creation of Ripple’s CBDC platform was announced last May. In the relevant statement, Ripple had stated that this platform allows central banks and governments to facilitate the next phase of digitalization of their financial services. It will also promote access to these services for millions of unbanked people.

The platform was designed to respond to multiple use cases, including wholesale and retail CBDCs on a private ledger or even issuing a stablecoin. Ripple’s solution has been cited many times as one of the best and most innovative in the crypto industry.

Colombia: Increased Interest in Blockchain and Crypto

After Montenegro and the Republic of Palau, Colombia is the latest country to take an interest in the CBDC platform from Ripple. The central bank of Colombia, Banco de la Republica, has partnered with the company to explore the use of blockchain technology. THE Ministry of Information and Communications Technology (MinTIC) will also be involved in this collaboration. This project is part of a larger initiative to experiment with blockchain under the supervision of MinTIC.

In August 2022, the Colombian government said it was considering the introduction of a CBDC to facilitate transactions and reduce tax evasion. The government also wanted to ban cash transactions for amounts exceeding 10 million Colombian pesos ($2,390).

Ripple positions itself as a key player in the crypto sector in Colombia

The pilot project in Colombia is expected to run until the end of this year. The objective will be to present to public entities how the unparalleled speed, scalability and transparency of blockchain technology can revolutionize payment systems and data management. Ripple stressed that its CBDC platform “will be experimented and tested in a controlled environment without compromising public resources”. For his part, the Minister Mauricio Lizcano stated that :

“The potential efficiency gains can be assessed through the results obtained as a result of developing a solution based on blockchain technology…(the blockchain) manages to improve and complete the processes in the entities in a secure way and efficient.”

This project is not the first on which Ripple has participated in this Latin American country. Previously, the company has already collaborated with Peersyt Technology for the storage and permanent authentication of title deeds on XRPL, Ripple’s public blockchain. Land ownership, and more specifically, the unequal distribution of land, was one of the factors behind the civil war in Colombia.

Sources: Ripple, Peersyt, BusinessWire, Coindesk

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