The deal, teased in January, could create a national digital currency for a country that now uses the euro.
The Central Bank of Montenegro announced on April 11 that it had signed an agreement with Ripple for the development of a strategy and pilot program for a Montenegrin digital currency in the form of a central bank digital currency, or a stablecoin. The country has used the euro as its currency since its introduction in 2002, despite not being part of the Eurozone.
“More details will be revealed later in the year,” RippleX’s vice president for central bank engagements and CBDCs, James Wallis, told Cointelegraph in a written interview. “The project will go through several stages, including identifying the practical application of a digital currency or national stablecoin.”
Wallis indicated that a sandbox stage is planned to put the future digital currency “Into circulation under controlled conditions. […] We’ll work closely with the Central Bank to determine use cases, key success factors, and timelines.” The project will begin this month, he added.
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Central Bank of Montenegro Governor Radoje Žugić said in a statement that the central bank would work with the government and the academic community to “analyse the advantages and risks that CBDCs or national stablecoins could pose with respect to the availability of electronic means of payment, security, efficiency, compliance with regulations, and most importantly the protection of end users’ rights and privacy.” He added:
“As a central bank committed to following modern national banking trends, the Central Bank of Montenegro is actively ensuring it maintains an efficient financial system.”
Montenegrin Prime Minister Dritan Abazovic first disclosed the upcoming deal between Ripple and the Montenegrin Central Bank in a tweet from the World Economic Forum Davos in January.
Produktivan sastanak sa CEO kompanije @Ripple @bgarlinghouse i VP za saradnju sa centralnim bankama #JamesWallis. Razgovarali smo o razvoju platne infrastrukture koja bi obezbijedila veću finansijsku dostupnost i inkluziju. Crna Gora otvorena za novu vrijednost i ulaganja. ⬇️ pic.twitter.com/YdPeWHUtCm
— Dr Dritan Abazovic (@DritanAbazovic) January 18, 2023
Ripple has been touting its expansion in the CBDC space for months. Wallis said the company “has multiple CBDC projects ongoing around the world and is in dialogue with dozens of central banks globally.”
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