Montenegro Enters Agreement with Ripple for CBDC Pilot Testing Project

The Central Bank of Montenegro (CBCG) has partnered with blockchain service provider Ripple for the development of a pilot program for the nation’s Central Bank Digital Currency (CBDC) or national stablecoin.

Per a Tuesday announcement, the project will analyze the advantages and associated risks of CBDCs or national stablecoins as a model for electronic payments, security, efficiency, compliance with regulations, and ultimately end-users rights and privacy protection.

Radoje Žugić, the CBCG Governor noted that the introduction of digital currency aligns with the bank’s core objectives of digitizing financial services, adding that the central bank is committed to following national banking trends while maintaining an efficient financial system.

Additionally, the launch of digital currency in the country will allow a range of benefits, such as minimal overall currency management, and reduced settlement risk, amongst other benefits. The bank also intends to seek clarity into the feasibility and technicality of the digital currency while provisioning the general public with a convenient electronic form of central bank money together with safety.

Despite not belonging to the Eurozone, the nation has used the euro since 2002 as it has no national currency of its own. For some time now the nation has been making cautious moves to become a part of the cryptocurrency space.

Ripple Makes Advancements in the CBDC Space

Recall that in January, Montenegro’s Prime Minister, Dr. Dritan Abazovic revealed that he had a discussion with some top executives at Ripple which was centered on developing an inclusive payment infrastructure for Montenegrins by leveraging Ripple’s technology.

Interestingly, the partnership continues Ripple’s expansion in the CBDC space. Despite its legal issues, the firm has numerous partnerships with various central banks for digital currency development. Late last year, the Republic of Palau announced a partnership with the blockchain payment company to develop its own stablecoin.

However, this is not the first time Palau is talking with Ripple about developing a digital currency, as the nation tapped the blockchain firm to develop a United States dollar-pegged digital currency to enhance cross-border payments in 2021.

Meanwhile, the legal battle between the US Securities and Exchange Commission (SEC) and Ripple has taken a new dimension following a recent court judgment.