Ripple Expands Into Latin America with CBDC Partnership in Colombia

The software business Ripple, which created the cryptocurrency XRP, is rapidly expanding throughout Latin America. In order to explore the world of central bank digital currency (CBDC) technology, the company today established a partnership with Colombia’s central bank. The agreement does not specifically state that Colombia intends to establish a CBDC, but the pilot program’s goal is to improve the nation’s high-value payment system utilizing the CBDC platform from Ripple, which makes use of the XRPL public blockchain.

Exploring CBDC Technology in Colombia

The Ministry for Information and Communications Technologies (MinTIC) and the Central Bank of Colombia have teamed up with Ripple to investigate the potential of CBDC technology. Through the agreement, numerous use cases that will strengthen Colombia’s high-value payment system will be piloted. The nation’s central bank wants to use Ripple’s CBDC platform to “pave the way for transformative advancements in the utilization of blockchain technology within the public sector.”

Understanding CBDCs and Global Adoption

CBDCs, which are backed by a central bank and are digital representations of a state’s fiat currency, are receiving a lot of attention from people all over the world. CBDCs are centralized forms of currency rather than decentralized ones like Bitcoin or Ethereum. Research and implementation of CBDCs are at varied levels in various nations. Colombia’s tax and customs office expressed interest in investigating a CBDC last year, demonstrating the nation’s propensity for adopting digital currencies.

Ripple’s Impact in Colombia

The central bank of Colombia and Ripple have worked together before. The Colombian government teamed with Ripple Labs to start a project last year in an effort to correct land allocation plans. The goal of the project, which was created by Ripple and the blockchain business Peersyst Technology, is to securely store and authenticate property titles on the public blockchain of Ripple. In one of the most unequal countries in the world, the objective is to reduce red tape and establish a more egalitarian system for distributing land.

In the beginning, Ripple was created to help banks and other financial institutions send money quickly and without any fees. Additionally, it launched XRP, a cryptocurrency that is presently the sixth-largest digital asset with a $24.6 billion market valuation. However, the U.S. Securities and Exchange Commission (SEC) sued Ripple for $1.3 billion in December 2020 on alleged securities violations involving the selling of XRP tokens. In an effort to take advantage of contradictions in the regulator’s position on cryptocurrencies, Ripple recently obtained the release of emails pertaining to an important speech by former SEC Director William Hinman through the ongoing legal struggle.