Montenegro’s apex bank taps Ripple for CBDC

The Central Bank of Montenegro (CBCG) has partnered with crypto and blockchain solutions provider Ripple to pilot the country’s proposed central bank digital currency (CBDC). This move puts Montenegro on the growing list of more than 100 countries exploring the use of a CBDC, including the UAE, Australia, Japan, Russia and India. CBCG says the introduction of a CBDC will help digitise the country’s financial services, increase financial inclusion and maintain an efficient financial system. The central bank will collaborate with the Montenegro government and academic institutions to create and test the functionality and potential of blockchain technology.

The project will go through a number of stages, including identifying the practical application and design of the digital currency, simulating its circulation and testing its use under controlled conditions. CBCG governor Radoje Žugić explains that the project will also “analyse the advantages and risks that CBDCs or national stablecoins could pose concerning electronic means of payment availability, security, efficiency, compliance with regulations, and most importantly, the protection of end users’ rights and privacy”.

The project in Montenegro is the latest in a series of CBDC pilots announced by central banks worldwide. In September 2021, Bhutan’s central bank also partnered with Ripple to pilot its own CBDC. As the interest in CBDCs continues to grow, central banks are increasingly turning to blockchain technology and fintech companies for collaboration to develop and test their digital currencies. The results of these pilots will provide valuable insights into the practicality and potential benefits of CBDCs, which could pave the way for more widespread adoption in the future.