- According to Gvenetadze, digital currency will be just as valuable and legitimate as banknotes and coins.
Governor Koba Gvenetadze announced on Wednesday that the Georgian central bank intends to launch a pilot programme for a digital Lari currency. Since 1995, Georgia has used the Lari as its official exchange currency. The National Bank of Georgia is currently in charge of issuing and overseeing it.
The goal of testing the innovation, according to Gvenetadze, was to ascertain how it would serve various functions. He stressed that the digital currency will have the same worth and legality as banknotes and coins.
Increased financial inclusion is one of the key advantages of a digital lari. A digital lari might aid in increasing the number of people who utilize the financial system by making it simpler for both individuals and businesses to access and use digital financial services. This might benefit Georgia’s development and economic progress.
An additional advantage of a digital lari could be improved security and decreased fraud. Since digital currencies may be encrypted and safeguarded with digital signatures, they may be more secure than physical money. This may make it more challenging for thieves to steal or counterfeit digital cash.
A digital lari can also offer a more effective and practical method of conducting transactions. Digital methods can facilitate transactions more quickly and affordably, which will lessen the demand for actual cash.
The national bank first launched the proposal to create a digital lari in 2021 and asked innovators to participate in public-private cooperation. The bank stated that the development of digital technologies highlighted the need to modernize central bank money by producing a digital form of the currency in order to better support the digital economy and boost the effectiveness of public policy.
The National Bank of Georgia (NBG) is considering making a Central Bank Digital Currency (CBCDC) accessible to the general public in order to take advantage of recent technological advancements and improve the effectiveness of the payment system and financial inclusion.
The CBDC will have legal tender status and will be a direct obligation of the central bank that can be used as a store of value or to settle payments.
According to the NBG, major central banks have been actively trying to implement the CBDC over the past few years, and the Bank for International Settlements, the largest association of central banks, frequently monitors progress in this direction. Both China and the US are either testing or getting ready to launch their own versions of digital currency.
The introduction of the digital lari in Georgia is a key step toward the modernization and expansion of the nation’s financial system. Even while there are difficulties and worries related to the introduction of a digital currency, the potential advantages, such as greater security and decreased fraud, make it an appealing choice for the country. A chance to test and assess the effects of digital lari will be provided by the pilot programme, which is expected to begin in 2023.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/18/georgia-takes-the-digital-leap-lari-goes-virtual-in-2023/