Montenegro Central Bank to Collaborate with Ripple on CBDC Pilot

The Prime Minister of Montenegro, Dritan Abazović, announced via Twitter that the country’s central bank is exploring a central bank digital currency (CBDC) in collaboration with Ripple (XRP).

The Montenegrin Prime Minister met with Ripple CEO Brad Garlinghouse and vice president James Wallis during the World Economic Forum in Davos to discuss pursuing a digital currency. Abazović said in a Twitter thread, he had something similar to a CBDC in mind, saying (translated by Cointelegraph):

In cooperation with @Ripple and the Central Bank, we launched a pilot project to build the first digital currency or stablecoin for Montenegro.

It is not yet clear what the purpose of the country’s digital currency will be, but the Balkan nation has no national currency of its own. It has been using the euro since 2002, when it was introduced, despite not being part of the Eurozone or a member of the European Union (EU). Montenegro applied for membership in the EU in 2008.

Montenegro is Pro-Crypto

Montenegro is well known as one of the most crypto-friendly nations. Its government has gone as far as to admit that technological advancements such as cryptocurrencies are changing the world and improving all industries. The country has, however, no framework in place regulating cryptocurrencies. Still, it advises all companies operating within the country and crypto exchangers to follow European guidelines relating to crypto. Montenegro is so pro-crypto that it allows real-estate purchases in Bitcoin, Ethereum, and other cryptocurrencies, according to reports by Coinspeaker.

Ripple Increases its Involvement in CBDC Projects

Ripple CBDC adviser Antony Welfare last year said the company has several pilots in progress for CBDCs, explicitly mentioning the Royal Monetary Authority of Bhutan and the Republic of Palau. Ripple launched a pilot of a private version of the XRP ledger (XRPL), which provides a platform for central banks to issue their digital currencies securely. According to the XRP Ledger website:

Ripple offers a complete platform for minting, managing, transacting, and destroying CBDCs. Each solution is built on a private ledger that is based upon XRP Ledger technology—a proven blockchain that has transacted over 70 million times over the course of 10 years and is trusted by financial institutions around the world.

The website further claims that its CBDC platform offers “stability, security, resilience, access and inclusion, interoperability and overlay services, and sustainability.”

Ripple also released a report in which it described the value of CBDCs, especially for smaller central banks wishing to advance their economies:

More financial institutions are exploring the use of Central Bank Digital Currency (CBDC) as the adoption of tokenization evolves. CBDCs will disrupt the financial sector and grant millions inclusive access to basic financial services at lower costs.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.