Montenegro intends to create and issue its own digital currency with the help of US-based crypto company Ripple. The southeastern European country, which unilaterally adopted the euro despite the eurozone developing a digital version of the common currency, is moving to make this plan a reality.
Montenegro’s Monetary Agency to cooperate with Ripple in the “National Stable Coin” project
The Central Bank of Montenegro (CBCG) has signed an agreement with blockchain solution provider Ripple to jointly create a strategy and pilot program to launch the country’s central bank digital currency (CBDC)
In a press release, Ripple emphasized that the introduction of a “domestically produced stablecoin” is a new step toward the digitization of financial services in the small Balkan country and will provide greater financial accessibility to its citizens.
More than 100 countries are currently exploring or have already developed CBDCs with multiple use cases in mind, such as increasing financial inclusion, modernizing monetary policy, improving payment security, and increasing the efficiency of cross-border payments.
This includes major economies such as China, which is more advanced than others in the digital renminbi project. Trials are underway in more than 20 regions of the People’s Republic, with more than 5.5 million merchants and other businesses participating.
Montenegro is not a member of the European Union or the Eurozone, but adopted the euro as its de facto legal tender in 2002. The government in Podgorica decided to embark on its own CBDC despite the realization of the digital euro.
European Central Bank (ECB) President Christine Lagarde is reported to have said in March that the digital euro, which is still in the research phase, would play an important role in protecting European payment autonomy. However, Montenegro cannot participate in this process because it does not have a formal agreement on the euro with the ECB.
The CBCG will work with Ripple and the CBDC to create a practical and secure digital currency in cooperation with the government of Montenegro and academic institutions, President Radoje Jugic assured. The Central Bank will also analyze the associated benefits and risks, including those related to the protection of end-user rights and privacy, he stressed.
“The Central Bank of Montenegro is bringing the next level of digital transformation to financial infrastructure and addressing the world’s biggest financial challenges, including financial inclusion,” added James Wallis, Vice President of Central Bank Engagement and CBDC at Ripple.
The Montenegro digital currency project is expected to go through several phases, with participants simulating the circulation of coins.