Montenegro intends to develop its own digital currency with the help of U.S.-based crypto firm Ripple. The Southeast European nation, which adopted the euro unilaterally, is pressing ahead with the plan in spite of the eurozone creating a digital version of the shared currency.
Monetary Authority of Montenegro to Cooperate With Ripple on ‘National Stablecoin’ Initiative
The Central Bank of Montenegro (CBCG) has inked an agreement with blockchain solutions provider Ripple in which the two sides will collaborate to devise a strategy and pilot program to launch the country’s central bank digital currency (CBDC)
The introduction of the “national stablecoin” will take Montenegro’s financial services into the digital age and offer greater financial access for its citizens, Ripple stated in a press release.
In excess of one hundred countries are currently investigating or already creating CBDCs with multiple use cases in mind, including extending financial inclusion and modernizing monetary policy, enhancing payment security and accelerating the efficiency of cross-border settlements.
The lengthy list includes major economies such as China, which has progressed more than others with its digital yuan project. Tests are underway in over two dozen regions of the People’s Republic and more than 5.5 million merchants and other businesses are participating.
Montenegro, not yet a member of the European Union or the eurozone, adopted the euro as its de facto legal tender in 2002. The government in Podgorica has decided to go ahead with its own CBDC despite the fact that a digital euro is also in the making.
President of the European Central Bank (ECB) Christine Lagarde was quoted as saying in March that a digital euro, still in its investigation phase, will play a key role in preserving Europe’s payment autonomy. Nonetheless, Montenegro is not in any official agreements with ECB regarding the euro and cannot take part in the process.
The CBCG will collaborate on the CBDC with Ripple and work with the Montenegrin government and academia to produce a practical and secure digital currency, Governor Radoje Žugić assured. The central bank will also assess the associated advantages and risks, including those relating to the protection of end users’ rights and privacy, he emphasized.
“The Central Bank of Montenegro is taking the next step in digitalizing its financial infrastructure and tackling some of the world’s biggest financial challenges, including financial inclusion,” added James Wallis, Ripple’s vice president of central bank engagements and CBDCs.
The Montenegrin digital currency project is likely to go through several stages, during which the participants wish to simulate the coin’s circulation and use under controlled conditions, the announcement detailed.
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