The Central Bank of Montenegro (CBCG) will collaborate with crypto and blockchain solutions provider Ripple to develop a strategy and pilot programme to launch the country’s first digital currency in the form of a Central Bank Digital Currency (CBDC) or national stablecoin.
What does this mean for Montenegro’s citizens?
Aligning with the CBCG’s core objectives, the digital currency’s introduction is another step forward to digitising financial services and fostering a world of greater financial accessibility for Montenegro’s citizens. A CBDC is a digital version of the currency issued by central banks.
Today, over a hundred countries are exploring and developing a Central Bank Digital Currency (CBDC) for many use cases including widening financial inclusion, modernising monetary policy, improving payment security and increasing cross-border payments efficiency.
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. 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.
What does the collaboration mean for CBCG?
The CBCG Governor Radoje Žugić said, “As a central bank committed to following up-to-date 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 Central Bank of Montenegro 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.”
“It will also analyse the advantages and risks that CBDCs or national stablecoins could pose concerning electronic means of payment availability, security, efficiency, compliance with regulations, and most importantly, the protection of end users’ rights and privacy.”
What does the collaboration mean for Ripple?
“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,” said James Wallis, Ripple’s Vice President of Central Bank Engagements & CBDCs.
“Ripple has a proven track record of successfully connecting disparate payment systems and championing blockchain’s utility to issue CBDCs and solve for global payments to hundreds of financial institutions worldwide. 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.”