The Central Bank of Montenegro and Ripple have signed an agreement to create a national digital currency in the form of a central bank digital currency (CBDC) or a stablecoin.
Montenegro, which has been using the euro since 2002 despite not being part of the Eurozone, could soon have its own digital currency. The project is expected to go through several stages, including identifying the practical application of the digital currency and a sandbox stage to put it into circulation under controlled conditions.
Partnership to Determine Use Cases, Key Success Factors, and Timelines
James Wallis, RippleX’s vice president for central bank engagements and CBDCs, stated that the company would work closely with the Central Bank to determine use cases, key success factors, and timelines for the project. He also said that the project would begin this month, and more details would be revealed later this year.
The Central Bank of Montenegro Governor, Radoje Žugić, said that the central bank would work with the government and the academic community to analyze the advantages and risks of CBDCs or national stablecoins. The analysis would cover areas such as the availability of electronic means of payment, security, efficiency, compliance with regulations, and most importantly, the protection of end-users’ rights and privacy.
Ripple’s Expanding Presence in the CBDC Space
Ripple has been focusing on its expansion in the CBDC space for months. Wallis said that the company had multiple CBDC projects ongoing around the world and was in dialogue with dozens of central banks globally. The deal with Montenegro adds to Ripple’s growing list of partnerships in the CBDC sector.
Montenegrin Prime Minister Dritan Abazovic first disclosed the upcoming deal between Ripple and the Montenegrin Central Bank in a tweet from the World Economic Forum Davos in January. The partnership between Ripple and Montenegro demonstrates the growing interest in CBDCs and the potential they hold for central banks and governments worldwide.
Conclusion
The partnership between Ripple and the Central Bank of Montenegro is a significant development in the CBDC space. Montenegro’s potential new digital currency could provide a more efficient means of payment for its citizens, while also offering the government greater control over its monetary policy. With Ripple’s expanding presence in the CBDC sector and ongoing dialogues with central banks globally, it will be interesting to see what other partnerships and developments arise in the coming months.
