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Montenegro intends to create and issue its own digital currency with help from U.S.-based crypto company Ripple. The Southeast European nation, which adopted the euro unilaterally, is moving to realize the plan despite the eurozone developing a digital version of the common currency.
The Central Bank of Montenegro (CBCG) has signed an agreement with blockchain solutions provider Ripple under which the two sides will collaborate to produce a strategy and pilot program to launch the country’s central bank digital currency (CBDC)
The introduction of the “national stablecoin” will represent another step towards digitalizing financial services in the small Balkan country and providing greater financial accessibility for its citizens, Ripple emphasized in a press release.
Over a hundred nations are currently exploring or already developing CBDCs with multiple use cases in mind, including widening financial inclusion and modernizing monetary policy, improving payment security and increasing the efficiency of cross-border settlements.
The long list includes major economies such as China, which has advanced more than others with its digital yuan project. Trials 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, neither a member of the European Union yet, nor of the eurozone, adopted the euro as its de facto legal tender in 2002. The government in Podgorica has decided to start working on its own CBDC despite that a digital euro is also in the making.
President of the European Central Bank (ECB) Christine Lagarde was quoted as stating in March that a digital euro, still in its investigation phase, will have a key role to play in safeguarding Europe’s payment autonomy. However, 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 create a practical and secure digital currency, assured Governor Radoje Žugić. The central bank will also analyze the associated advantages and risks, including those concerning the protection of end users’ rights and privacy, he emphasized.
“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,” added James Wallis, Ripple’s vice president of central bank engagements and CBDCs.
The Montenegrin digital currency project is expected to go through several stages, during which the participants want to simulate the coin’s circulation and use under controlled conditions, the announcement detailed.
