CBDC Platform - Part 2: Pilots & Partnerships

Known CBDC Engagements (as of 2024-2025):

ANNOUNCED PILOTS/ENGAGEMENTS:

- Announced: 2022
- Type: Stablecoin/digital currency pilot
- Status: Pilot/testing
- Population: ~18,000

- Announced: 2023
- Partner: Royal Monetary Authority
- Type: Retail CBDC exploration
- Status: Pilot
- Population: ~780,000

- Announced: 2023
- Partner: Central bank (Banco de la República)
- Type: CBDC exploration
- Status: Pilot/testing
- Population: ~51 million

- Announced: 2023
- Type: CBDC research/pilot
- Status: Exploration
- Population: ~620,000

- Announced: 2023
- Partner: National Bank
- Type: CBDC pilot
- Status: Pilot
- Population: ~3.7 million

- Announced: Various
- Type: e-HKD pilot participation
- Status: One of multiple vendors in pilot
- Population: ~7.5 million

- Various conversations, MOUs, explorations
- Often not publicly detailed

The Engagement Spectrum:

• Discussions, presentations

• No commitment

• Information gathering

• Can be announced as "partnership"

• Formal agreement to explore

• Still non-binding

• Framework for collaboration

• Often announced prominently

• Actual technology deployment

• Limited scope testing

• Proof of concept

• May never expand

• Broader testing

• More participants

• Real-world scenarios

• Still not production

• Public availability (limited)

• Real money/real users

• Geographic or feature constraints

• Approaching production

• Nationwide/full rollout

• Ongoing operations

• This is the goal

RIPPLE'S ENGAGEMENTS: Mostly Stages 2-4
NO RIPPLE CBDC AT STAGE 5-6 YET

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Profile:

PALAU

- Pacific island nation
- Population: ~18,000
- Economy: Tourism, fishing
- Currency: Uses US Dollar (no own currency)
- Status: US-associated (compact of free association)

- Announced: September 2022
- Initial focus: USD-backed stablecoin
- Evolution: Exploring national digital currency
- Notable: First announced Ripple CBDC pilot

- Government of Palau + Ripple collaboration
- Test digital currency on XRPL (public) initially
- Later pivoted toward private ledger option

- Pilot phase
- Testing with limited participants
- Not a full CBDC (Palau uses USD)
- Exploring use cases

Analysis:

SIGNIFICANCE:
✓ First country partnership announcement
✓ Proof of concept for small economy approach
✓ Learning experience for Ripple

LIMITATIONS:
✗ Tiny population (18,000)
✗ No national currency (uses USD)
✗ Limited economic relevance
✗ Not a "real" CBDC (more like stablecoin)

- PR value: High
- Economic significance: Minimal
- Path to production: Uncertain
- XRP relevance: None (private ledger)

Profile:

BHUTAN

- Himalayan kingdom
- Population: ~780,000
- Economy: Tourism, hydropower
- Currency: Ngultrum (BTN), pegged to Indian Rupee
- Notable: Famous for "Gross National Happiness"

- Announced: September 2023
- Partner: Royal Monetary Authority of Bhutan
- Focus: Retail CBDC pilot
- Context: Bhutan also has significant crypto holdings

- CBDC pilot partnership
- "Digital Ngultrum" exploration
- Financial inclusion focus
- Cross-border payments interest

- Pilot phase
- Technical testing underway
- Limited public information
- Timeline to production unclear

Analysis:

SIGNIFICANCE:
✓ Real central bank (Royal Monetary Authority)
✓ Real national currency (Ngultrum)
✓ Stated financial inclusion goals
✓ Interesting cross-border potential (India connection)

LIMITATIONS:
✗ Small population (780,000)
✗ Limited economic scale
✗ Early stage (pilot)
✗ Path to production uncertain

- More legitimate than Palau (real currency)
- Financial inclusion use case credible
- Still very small economy
- Years from potential production

Profile:

COLOMBIA

- South American nation
- Population: ~51 million
- Economy: Diversified (oil, coffee, services)
- Currency: Colombian Peso (COP)
- Central Bank: Banco de la República

- Announced: 2023
- Partner: Central bank collaboration
- Focus: CBDC research and testing
- Context: Colombia actively exploring CBDC

- Ripple working with Colombian central bank
- Part of broader CBDC exploration
- Testing digital payments infrastructure
- Financial inclusion potential

- Research/early pilot phase
- One of multiple vendors/approaches
- Central bank still evaluating options
- Long decision timeline expected

Analysis:

SIGNIFICANCE:
✓ Largest economy in Ripple's CBDC portfolio
✓ Real central bank engagement
✓ Growing market (51M people)
✓ Active CBDC research program

LIMITATIONS:
✗ Ripple is one option, not chosen vendor
✗ Early stage exploration
✗ Long decision cycles expected
✗ Competition from other vendors

- Best opportunity in Ripple's portfolio (scale)
- But also most competitive
- Nothing "won" yet
- Years from any decision, let alone production

Profile:

MONTENEGRO

- Balkan nation
- Population: ~620,000
- Economy: Tourism, services
- Currency: Uses Euro (not Eurozone member)
- Status: EU candidate country

- Announced: 2023
- Focus: CBDC research/exploration
- Context: Montenegro uses Euro but isn't EU member

- Exploration of digital currency capabilities
- Part of financial modernization efforts
- Research collaboration

- Early exploration
- Limited public details
- Complex situation (uses Euro)

Analysis:

SIGNIFICANCE:
✓ European market presence
✓ Modernization interest

LIMITATIONS:
✗ Uses Euro—no national currency to digitize
✗ Small population
✗ EU membership aspirations may complicate
✗ Limited practical CBDC path

- Primarily PR value
- No clear CBDC use case (no own currency)
- Not meaningful engagement

Profile:

GEORGIA

- Caucasus nation
- Population: ~3.7 million
- Economy: Agriculture, tourism, services
- Currency: Georgian Lari (GEL)
- Central Bank: National Bank of Georgia

- Announced: 2023
- Partner: National Bank of Georgia
- Focus: Digital Lari exploration
- Context: Georgia modernizing financial infrastructure

- CBDC pilot partnership
- Digital Lari research
- Financial innovation collaboration

- Pilot phase
- Technical evaluation underway
- Limited public updates

Analysis:

SIGNIFICANCE:
✓ Real national currency (Lari)
✓ Active central bank engagement
✓ Reasonable size (3.7M)
✓ Modernization-focused government

LIMITATIONS:
✗ Small economy
✗ Early stage
✗ Competition possible

- Credible engagement
- But small scale
- Years from production

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The Strategic Logic:

• Smaller bureaucracies

• Less political complexity

• Shorter procurement cycles

• Can actually close deals

• Central banks can experiment

• Failure less catastrophic

• Innovation-friendly environment

• Less risk-averse

• "We have real CBDC deployments"

• References for larger deals

• Learn from implementations

• Build case studies

• G20 central banks aren't choosing Ripple

• Build from where you can win

• Establish track record first

• Play long game

Honest Interpretation:

• Smart, pragmatic approach

• Build credibility over time

• Learn with lower-stakes partners

• Patient long-term play

• Can't compete for major markets

• "Crypto company" disadvantage real

• May never scale beyond small economies

• Limited revenue potential

• Strategy is rational given constraints

• But constraints are real and limiting

• Success = dozens of small economies

• Unlikely to win Fed, ECB, PBoC

What Would Need to Happen:

1. Complete 2-3 production deployments
2. Build track record and case studies
3. Win mid-size economy (10-50M population)
4. Establish regional reputation
5. Gradually move up market

TIMELINE: 5-10+ years (optimistic)

• Pilots often don't convert to production
• Competition intensifies
• Technology changes
• Political factors

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Industry Reality:

CBDC PILOT CONVERSION RATES:

- Never reach production
- Get paused or canceled
- Shift to different vendors
- Remain in perpetual "pilot"

- Political changes
- Technical challenges
- Economic analysis unfavorable
- Priorities shift
- Budget constraints

CONVERSION RATE ESTIMATE: <20%
(Most pilots don't become production systems)

Assessment by Engagement:

• Conversion probability: Low-Medium

• Reason: Not a real CBDC (no currency)

• Best case: Digital USD stablecoin

• Conversion probability: Medium

• Reason: Real commitment, small scale manageable

• Risk: Priorities could shift

• Conversion probability: Low

• Reason: Ripple is one option among many

• Risk: Competition, politics

• Conversion probability: Very Low

• Reason: No national currency

• Reality: PR engagement

• Conversion probability: Medium

• Reason: Active engagement, reasonable scope

• Risk: Competition, timeline

• Maybe 1-2 production deployments

• Within 3-5 years

• In very small economies

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Status of XRP in CBDCs:

CURRENT: Zero XRP involvement

None of Ripple's CBDC pilots involve XRP.
They use private ledgers, not public XRPL.
Central banks control their own currencies.
No XRP bridge implementations.

The Interoperability Vision:

THE THEORY:
Country A CBDC ↔ XRP Bridge ↔ Country B CBDC

1. Both countries deploy CBDCs
2. Both agree to interoperability
3. Both accept XRP as bridge
4. Technical integration complete

PROBABILITY: Very Low

- Central banks want sovereign control
- Depending on XRP = external dependency
- Political resistance to crypto bridge
- Other interoperability options exist
- Could use bilateral agreements instead

What XRP Holders Should Expect:

• Zero XRP impact from CBDC pilots

• No change to this assessment

• Don't expect CBDC news to move XRP

• Possible production CBDCs (small economies)

• Still no XRP involvement

• Theoretical discussions may continue

• Very small chance of XRP interoperability

• Would require major political shifts

• Don't build investment thesis on this

RECOMMENDATION:
Treat CBDC as Ripple business line
NOT as XRP utility driver
Separate the two in analysis

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CBDC Pilot Landscape:

• Thailand central bank pilot

• Australia exploration

• Multiple other engagements

• Similar small economy focus

• Australia engagement

• Various explorations

• Ethereum-based approach

• Actual deployed CBDCs (Eastern Caribbean, Nigeria)

• Leading in production deployments

• Caribbean focus

• Various central bank relationships

• More consulting than product

• Declining crypto focus

• China: Digital Yuan (in-house)

• EU: Digital Euro exploring (likely in-house)

• US: Digital dollar research (TBD)

Comparative Assessment:

• Ripple: 0

• Bitt: 2+ (Eastern Caribbean, Nigeria)

• Others: 0-1

• Ripple: 5+ announced

• R3: Multiple

• Others: Various

• All vendors: Limited

• Major central banks: Building in-house or TBD

ASSESSMENT:
Ripple is competitive but not leading
Bitt ahead on production deployments
Major economies not using vendors

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✅ Ripple has real CBDC engagements with multiple countries (pilots, not production).

✅ Small economy focus is strategic choice given competitive constraints.

✅ None of the engagements involve XRP—all use private ledgers.

✅ Pilots ≠ production—most pilots globally never become production systems.

⚠️ Conversion rates—how many pilots will become production CBDCs?

⚠️ Timeline—years remain even for most advanced pilots.

⚠️ Competitive dynamics—can Ripple win against other vendors?

⚠️ Scale potential—can small economy success lead to larger wins?

🔴 Zero production deployments after years of announcements.

🔴 Tiny populations in most engagements (combined <60M for all pilots).

🔴 No G20 traction—major economies not engaging Ripple.

🔴 XRP irrelevant—CBDC progress doesn't affect XRP utility.

Ripple's CBDC pilots represent real engagement with real central banks, but the scale is tiny and the path to meaningful impact is long and uncertain. The strategy of targeting small economies is rational given constraints, but also reveals those constraints.

Most importantly: CBDC progress has no bearing on XRP. Don't expect CBDC announcements to affect XRP price or utility. They're separate business lines with no current connection.

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Assignment: Analyze Ripple's CBDC pilot portfolio and assess realistic expectations.

Requirements:

Part 1: Pilot Summary Table (1 page)

Create a comprehensive table:

Country	Population	Currency	Announced	Stage	Conversion Probability
Palau
Bhutan
Colombia
Montenegro
Georgia

Add brief notes for each country's significance.

Part 2: Strategic Analysis (1 page)

• Why is Ripple focusing on small economies?
• What does this strategy reveal about Ripple's competitive position?
• Is this a smart strategy or a sign of weakness?
• What would need to happen for CBDC to become significant revenue?

Part 3: Conversion Assessment (1/2 page)

• How many pilots are likely to become production?
• What's a realistic timeline?
• What would change your assessment?

Part 4: XRP Reality Check (1/2 page)

• Do these pilots involve XRP? (No)

• Should XRP holders care about CBDC progress?

• What would change the XRP relevance assessment?

• 3 pages total

• Summary table required

• Clear, direct analysis

• Pilot accuracy (25%)

• Strategic analysis (35%)

• Conversion assessment (20%)

• XRP honesty (20%)

Time Investment: 2-3 hours
Value: Framework for evaluating CBDC announcements realistically.

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For Next Lesson:
Lesson 14 examines product integration—how Ripple's various products (RippleNet, ODL, RLUSD, Liquidity Hub, Custody, CBDC) work together and whether the platform strategy creates real value.

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End of Lesson 13

End of Phase 2: Product Deep Dives

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Total words: ~4,200
Estimated reading time: 22 minutes
Estimated deliverable time: 2-3 hours

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Course 52: Ripple Product Suite Overview
Lesson 13 of 18
XRP Academy - The Khan Academy of Digital Finance