Montenegro is the latest country to join the growing trend of central banks developing their digital currencies. The Central Bank of Montenegro (CBCG) has partnered with Ripple, a blockchain solutions provider, to create 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 stablecoin.
This collaboration aligns with the CBCG’s core objectives to digitize financial services and promote financial accessibility for Montenegro’s citizens.
A CBDC is a digitized version of a country’s currency that is issued by its central bank. More than 100 countries are exploring and developing CBDCs for various use cases, including modernizing monetary policy, improving payment security, increasing cross-border payments efficiency, and widening financial inclusion.
The CBCG Governor Radoje Žugić stated that the bank is committed to following up-to-date national banking trends, and the collaboration with Ripple will help maintain an efficient financial system.
The CBCG will work with the government of Montenegro and Montenegro’s academia to create a practical digital currency or secure currency solution to test the main blockchain technology’s functionality and potential.
The project will go through several stages, including identifying the practical application of a digital currency or national stablecoin and simulating its circulation and use under controlled conditions.
Ripple, with its proven track record of successfully connecting disparate payment systems and championing blockchain’s utility to issue CBDCs and solve global payments, is pleased to have been chosen by the CBCG to help launch its first digital currency.
James Wallis, Ripple’s Vice President of Central Bank Engagements & CBDCs, stated that the CBCG is bringing the next level of digital transformation to its financial infrastructure and addressing some of the world’s biggest financial challenges, including financial inclusion.
The introduction of a CBDC or national stablecoin in Montenegro is another step towards digitizing financial services and promoting greater financial accessibility for citizens.
The CBCG’s collaboration with Ripple will help create a practical digital currency solution that will not only test the main blockchain technology’s functionality and potential but also analyze the advantages and risks that CBDCs or national stablecoins could pose regarding electronic means of payment availability, security, efficiency, compliance with regulations, and the protection of end users’ rights and privacy.
Overall, the CBCG’s partnership with Ripple to develop a CBDC or national stablecoin is a significant step towards a world of greater financial accessibility and inclusion for Montenegro’s citizens. This collaboration will not only promote the digitization of financial services but also analyze the advantages and risks of CBDCs or national stablecoins, ultimately leading to a more efficient and secure financial system.
Read Also: Swift’s Experimental CBDC Connector Finds “Clear Potential and Value” in Sandbox Testing