With aid from the American cryptocurrency company Ripple, Montenegro plans to develop and issue its own digital currency. Despite the eurozone building a digital version of the common currency, the nation of Southeast Europe, which joined the euro unilaterally, is moving to carry out the concept.
Ripple And Montenegro’s Monetary Authority To Develop National Stablecoin
In accordance with an agreement they signed, the Central Bank of Montenegro (CBCG) and blockchain solutions company Ripple will work together to develop a plan and pilot project to introduce the nation’s central bank digital currency (CBDC).
According to a press statement from Ripple, the launch of the “national stablecoin” will be a further step toward the digitalization of financial services in the small Balkan nation and the improvement of financial accessibility for its locals.
With various use cases in mind, such as expanding financial inclusion and updating monetary policy, enhancing payment security, and boosting the effectiveness of cross-border settlements, more than a hundred countries are presently examining or constructing CBDCs.
Major economies like China, which has advanced further than others with its digital yuan effort, are included in the lengthy list. More than 5.5 million retailers and other enterprises are taking part in the trials happening in more than 20 different regions of the People’s Republic.
Montenegro, a country that is not yet a member of the European Union or the eurozone, made a decision in 2002 to adopt the euro as its legal tender. Even if a digital euro is also in the works, the Podgorica government has decided to begin developing its own CBDC.
In March, Christine Lagarde, president of the European Central Bank (ECB), was cited as saying that a digital euro, which is still in the research stage, will be essential to preserving Europe’s payment autonomy. Yet Montenegro is not a party to any official agreements with the ECB regarding the euro and is, therefore, unable to participate in the process.
In order to develop a useful and secure digital currency, the CBCG will team up with Ripple on the CBDC and cooperate with the Montenegro government and academia, assuring Governor Radoje Žugić. He noted that the central bank would also assess the benefits and hazards, especially those related to the preservation of end users’ rights and privacy.
According to James Wallis, the Vice President of Central Bank Engagements and CBDCs at Ripple, the Central Bank of Montenegro is advancing its financial infrastructure to the next level of digital transformation. He further elaborated that the bank is tackling significant financial challenges, such as financial inclusion, through this initiative.
The initiative to create digital money for Montenegro is scheduled to go through multiple stages, during which the participants want to imitate the coin’s circulation and use it in safe environments.