In order to create a plan and test a national stablecoin or central bank digital currency, Montenegro’s central bank reported on April 11 that it has signed a contract with Ripple (CBDC). James Wallis, vice president of Ripple for central bank engagements and CBDCs stated that the project will start this month.
As Montenegro lacks a national currency, it is unknown exactly what the CBDC’s prospective future will include. The nation has been utilising the euro since 2002 even though it is not a member of the Eurozone.
The crypto solutions provider Ripple aims to revolutionise how value is managed, moved, and tokenized in society. Faster, more transparent, and more cost-effective, their business solutions address inefficiencies that have long characterised the status quo. And along with partners and the greater developer community, they pinpoint use cases where cryptocurrency technology can motivate fresh company strategies and open up new career prospects.
Radoje ugi, the governor of the Central Bank of Montenegro, said in a statement that the central bank would examine the benefits and drawbacks of CBDCs or national stablecoins in terms of electronic means of payment, security, effectiveness, compliance with regulations, and the protection of end-users’ rights and privacy in collaboration with the government and academic community.
Žugić further stated that the Central Bank of Montenegro actively works to preserve an effective financial system as a central bank oriented to contemporary national banking trends. Wallis reflected that the initiative will go through several stages, including discovering real-world uses for the digital currency and a sandbox stage to test the currency’s viability in a controlled environment.
The vice president of Ripple stated that the firm has several CBDC initiatives active internationally and is in communication with numerous central banks globally. He also noted that Ripple has been developing in the CBDC market.
The planned agreement between Ripple and the Montenegro Central Bank was initially announced by Montenegrin Prime Minister Dritan Abazovic during the World Economic Forum in Davos in January. Later in the year, further information about the project will be made public.
For some time now, the Montenegro government has been attempting to enter the bitcoin market. It is seen as being receptive to cryptocurrencies and recently sponsored an event named “Future Now!” in April of last year, which Vitalik Buterin, the co-founder of Ethereum, attended. Being a member of the eurozone and the European Union (EU), Montenegro would embrace digital euro if it were implemented by the European Central Bank (ECB).
Apart from Montenegro, 114 nations are considering creating a CBDC for the public, with some of those countries having already moved into the implementation stage. Digital currencies have already been introduced in certain nations, including China, India, Nigeria, and the Bahamas. Meanwhile, the US is still under scepticism about developing a centralised digital currency which puts them at a halt. Others, like Sweden and Japan, are getting ready for potential rollouts.