Montenegro’s central bank, the Central Bank of Montenegro (CBCG), has partnered with blockchain provider Ripple to develop a pilot for a central bank digital currency (CBDC). The pilot project will involve the identification of practical applications for a national stablecoin and the creation of a design to simulate its circulation.
The CBCG Governor Radoje Zugic stated that the project would analyze the advantages and risks of CBDCs or national stablecoins concerning electronic means of payment availability, security, efficiency, compliance with regulations, and most importantly, the protection of end-users’ rights and privacy.
Over 100 countries are currently exploring the development of a CBDC, with some having already entered a practical phase. As a member of the European Union (EU) and part of the eurozone, Montenegro would adopt a digital euro if the European Central Bank (ECB) decides to introduce one later this year.
The partnership with Ripple is expected to provide the CBCG with valuable insights into the potential use cases and benefits of CBDCs, which will help them determine the most effective way to integrate a national stablecoin into the country’s financial system.
This move by the CBCG is part of a growing trend towards the digitization of money, which has been accelerated by the COVID-19 pandemic. CBDCs offer numerous benefits, including faster and cheaper transactions, increased financial inclusion, and improved security.
The partnership between the CBCG and Ripple is an exciting development for the blockchain industry, which is increasingly being recognized as a key player in the future of finance. As more central banks explore the potential of CBDCs, it is likely that we will see further partnerships between blockchain companies and financial institutions.
