Montenegro to Test Digital Currency With Ripple: Central Bank

•The Central Bank of Montenegro is partnering with Ripple to develop a pilot program for a central bank digital currency (CBDC).
•The project will analyze the advantages and risks that CBDCs or national stablecoins could pose concerning electronic means of payment availability, security, efficiency, compliance with regulations, and end user rights and privacy.
•Montenegro uses the euro as its de facto currency but is not a member of the European Union.

Central Bank of Montenegro Tests CBDC With Ripple

The Central Bank of Montenegro (CBCG) has announced plans to develop a pilot program for a central bank digital currency (CBDC) in partnership with blockchain provider Ripple. CBCG Governor Radoje Zugic stated that the project will analyze the advantages and risks that CBDCs or national stablecoins could pose concerning electronic means of payment availability, security, efficiency, compliance with regulations, and end user rights and privacy.

Adoption Of Euro As De Facto Currency

Montenegro is not an EU member state but has adopted the euro as its de facto currency without joining the eurozone. The European Central Bank and EU are set to decide whether to introduce a digital euro later this year. Over 100 countries are exploring the possibility of issuing their own CBDC which would provide citizens with access to digitized forms of central bank money for use by the public.

Benefits Of A Digital Currency

A digital currency can offer numerous benefits including improved accessibility for users who may not have access to traditional banking services or products; increased financial inclusion; faster payments; lower transaction costs; improved liquidity management; greater transparency in monetary policy actions; enhanced data collection capabilities; better oversight over monetary policy goals; more efficient tax collection processes; improved anti-money laundering efforts; and increased competition amongst banks and other financial institutions.

Ripple’s Role In The Project

Ripple has been selected as one of several partners in helping CBCG identify practical applications of a CBDC while also coming up with designs to simulate circulation. It has recently announced new research initiatives into cross-border payments using distributed ledger technology (DLT) such as blockchain as well as helping other countries explore potential use cases for their own digital currencies.

Conclusion

The Central Bank of Montenegro’s partnership with Ripple is just one example among many others across various nations looking into how distributed ledger technology can help improve existing financial systems while also providing citizens access to more secure forms of money. Countries like China have already launched their own versions of digital currencies while others like Sweden are still exploring different options when it comes to having their own form of national money based on DLT infrastructure such as blockchain technology.