Montenegro intends to create and issue its own digital currency with the help of US-based crypto company Ripple. The Southeast European nation, which unilaterally adopted the euro, is moving ahead with plans to develop a digital version of the common currency even as the eurozone plans to develop one.
The Central Bank of Montenegro (CBCG) has signed an agreement with blockchain solutions provider Ripple, under which both parties will be able to use the country’s central bank digital currency, cbdc.
The introduction of a “national stablecoin” will represent another step in the small Balkan country towards digitizing financial services and providing greater financial access for its citizens, Ripple stressed in a press release.
Ripple and CBDCs are on the Rise
More than a hundred countries are currently exploring or already developing CBDCs with multiple use cases in mind, including expanding financial inclusion.
The long list includes major economies such as China, which has been more advanced than others with its digital yuan project.
Trials are underway in more than two dozen regions of the People’s Republic, and more than 5.5 million merchants and other businesses are participating.
Montenegro Has Used Euro as Tender Since 2002
Christine Lagarde, president of the European Central Bank (ECB), was quoted in March as saying that a digital euro, still in its testing phase, would have an important role in safeguarding Europe’s payment autonomy.
However, Montenegro is not in any official agreement with the ECB regarding the euro and cannot participate in the process.
CBCG will collaborate with Ripple on a CBDC and work with the Montenegrin government and academia to create a practical and secure digital currency, assured Governor Radoje Zugic.
He stressed that the central bank will also analyze the benefits and risks related to protecting the rights and privacy of end users.
“The Central Bank of Montenegro 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,” James Wallis, Head of Central Bank Engagement and CBDC at Ripple, said the vice president.
The announcement detailed that the Montenegrin digital currency project is expected to go through several phases during which participants seek to simulate the coin’s circulation and use under controlled conditions.
As expected, there is plenty to do and even more to plan before XRP becomes the official supplier of everything and anything crypto for the nation of Montenegro.
The project will explore the practical application of a digital currency or national stablecoin and the design to simulate its circulation and use under controlled conditions.
CBCG Governor Radoje Žugić’s Thoughts
“We look forward to collaborating with Ripple on the pilot project for creating CBDC or stablecoin.
“Through the project, 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.
“It will also analyze 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.”
Let’s hope this is the crypto impetus that the world needs to see in order to adopt crypto further and support more projects like the one happening in Montenegro right now.