Ripple and Montenegro have reached an agreement on a project for an undisclosed national digital currency
April 11, 2023 9:33 AM
The agreement, first hinted at in January, may result in the creation of a national digital currency for a country that now uses the euro.
On April 11, the Central Bank of Montenegro stated that it has inked an agreement with Ripple to develop 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 country has used the euro as its currency since its introduction in 2002.
"Additional specifics will be published later this year," said James Wallis, RippleX's vice president for central bank engagements and CBDCs, in a recent written interview. "The project will proceed through a number of phases, one of which will be determining the usefulness of a digital currency or national stablecoin in practice."
Wallis stated that a sandbox stage is planned to put the future digital currency "into restricted circulation." [...] We'll collaborate closely with the Central Bank to identify use cases, important success factors, and timescales." He also stated that the project will commence this month.
In a statement, Central Bank of Montenegro Governor Radoje ugi stated that the central bank would collaborate with the government and academic community to "analyze the benefits 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 went on to say:
"Being a central bank committed to following modern national banking trends, the Central Bank of Montenegro actively ensures the financial system's efficiency."
In a tweet from the World Economic Forum Davos in January, Montenegro Prime Minister Dritan Abazovic initially revealed the imminent cooperation between Ripple and the Montenegrin Central Bank.
Ripple has been boasting its CBDC expansion for months. According to Wallis, the company "has many CBDC projects underway around the world and is in contact with dozens of central banks globally."