The Central Bank of Montenegro (CBCG) has agreed to collaborate with the enterprise crypto and blockchain solutions provider Ripple. The two organisations will develop a strategy and pilot program to launch the country’s first digital currency in the form of a central bank digital currency (CBDC) or national stable coin.
Aligning with the CBCG’s core objectives, the digital currency’s introduction is another step forward to digitising financial services. It is also helping foster a world of greater financial accessibility for Montenegro’s citizens. A CBDC is a digitised version of the currency issued by central banks. Over a hundred countries are exploring and developing a central bank digital currency for many use cases. These include:
- Widening financial inclusion
- Modernising monetary policy
- Improving payment security
- Increasing cross-border payments efficiency
Simultaneously, the European Central Bank is working to develop the Digital Euro concept as a future means of safe, secure, and practical electronic payment in the Euro area.
Developing the CBDC
The CBCG governor Radoje Žugić noted: “As a central bank committed to following up-to-date national banking trends, the CBCG is actively ensuring it maintains an efficient financial system.
“We look forward to collaborating with Ripple on the pilot project for creating CBDC or stablecoin. Through the project, the CBCG will work with the Government of Montenegro and Montenegro’s academia to create a practical digital currency or secure currency solution. It will test the main blockchain technology’s functionality and potential.
“Additionally, it will also analyse the advantages and risks that CBDCs or national stablecoins could pose. Especially concerning electronic means of payment availability, security, efficiency, and compliance with regulations. But most importantly, it concerns the protection of end users’ rights and privacy.”
The project will go through several stages, including identifying the practical application of a digital currency or national stablecoin and the design to simulate its circulation and use under controlled conditions.
“The Central Bank of Montenegro is bringing the next level of digital transformation to its financial infrastructure. It is addressing some of the world’s biggest financial challenges including financial inclusion,” said James Wallis, Ripple’s vice president of central bank engagements and CBDCs.
“Ripple has a proven track record of successfully connecting disparate payment systems. Ripple also champions blockchain’s utility to issue CBDC and solve for global payments to hundreds of financial institutions around the world. We are pleased that the CBCG has chosen Ripple to help launch its first digital currency and further address the country’s core financial objectives.”