The Central Bank of Montenegro (CBCG) plans to develop a central bank digital currency (CBDC) pilot with blockchain provider Ripple.
On April 11, the Central Bank of Montenegro stated that it has inked a deal with Ripple to establish a strategy and pilot program for a Montenegrin digital currency in the form of a central bank digital currency, also known as a stablecoin. Despite not being a member of the Eurozone, the nation has used the euro as its currency since its introduction in 2002.
The central bank will identify the practical use of a national stablecoin and create a design to replicate its circulation as part of the pilot, Ripple stated on Tuesday.
In a statement, Central Bank of Montenegro Governor Radoje ugi stated that the central bank would analyze the advantages and risks that CBDCs or national stablecoins could pose in terms of the availability of electronic means of payment, security, efficiency, regulatory compliance, and, most importantly, the protection of end users’ rights and privacy.
He added: “As a central bank committed to following modern national banking trends, the Central Bank of Montenegro is actively ensuring it maintains an efficient financial system.
In a tweet from the World Economic Forum Davos in January, Montenegrin Prime Minister Dritan Abazovic initially revealed the imminent cooperation between Ripple and the Montenegrin Central Bank.
According to James Wallis, RippleX’s vice president for central bank relations and CBDCS, a sandbox stage is planned to put the future digital currency into circulation under controlled conditions. They will collaborate closely with the Central Bank to identify use cases, important success criteria, and timescales. He also stated that the project will commence this month.
Montenegro Joins List of Countries Exploring CBDC
Over 100 nations are investigating the creation of a CBDC – a digital version of central bank money for public usage – with several already entering a practical phase. Montenegro is a member of the European Union (EU) and a member of the eurozone, therefore it would adopt a digital euro if the European Central Bank (ECB) issued one. The ECB is scheduled to make a decision on whether to do so later this year.