3 - 6 minute read
Ripple, a US-based technology firm, and the Central Bank of Montenegro signed a deal on April 11 to create a strategy and pilot programme on launching Montenegro’s digital currency. The stablecoin will be in the form of a central bank digital currency with more details to follow later in the year, according to James Wallis, Vice President for Central Bank Engagements and CBDCs at RippleX. Montenegro’s current currency is the euro, and the country is not part of the European Union. The initiative will go through several phases, including identifying the practical applications of a national stablecoin, says Wallis.
The project will begin this month, starting with the sandbox stage, where the virtual currency will be put into circulation under controlled conditions. Wallis states that Ripple will collaborate closely with Montenegro’s Central Bank to determine use cases, key success factors, and timelines. In a statement, Radoje Žugić, the governor of Montenegro’s Central Bank, said that the central bank would collaborate with the government and academic community to analyse the benefits and risks that CBDCs or national stablecoins could pose with respect to electronic payment availability, security, and privacy rights of end-users.
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
Montenegrin Prime Minister Dritan Abazović announced the upcoming partnership between the Montenegrin Central Bank and Ripple in January, during the World Economic Forum Davos. Ripple has been increasing its presence in the CBDC space for several months, and Wallis stated that the firm has many CBDC projects worldwide while in dialogue with several central banks globally.
Ripple and Montenegro
Montenegro has been recognising blockchain’s potential and promoting the country’s blockchain suitability. With Ripple’s help, the government aims to develop Montenegro’s digital payment infrastructure, which would improve financial accessibility and inclusiveness. As a central bank committed to following the latest national banking trends, the Central Bank of Montenegro will provide an efficient financial system, as Governor Radoje stated. The Montenegrin Prime Minister’s tweet also expressed the country’s openness to new investments and values.
Ripple’s Significant Expansion
Ripple aims to continue expanding its progress in the CBDC market and blockchain technology. Several global central banks, such as the Bank of Japan, are increasing their investment in CBDCs to improve payment efficiency and reduce payment costs. The implementation and adoption of CBDCs would also lead to better integration in global payment systems as they break down economic and political barriers. With Ripple’s commitment to CBDC adoption, the company is in dialogue with more than a dozen worldwide central banks to improve their payment systems and financial inclusion for end-users.
The Bottom Line
Ripple’s partnership with Montenegro is significant as the company continues to extend its reach into the CBDC market. With the firm’s expansion into various countries globally, it would have profound implications on payment efficiency and customer experience. As CBDC adoption increases globally, investors should pay attention to Ripple’s progress on various CBDC projects worldwide. Furthermore, the Montenegrin partnership with Ripple would provide opportunities for traders to speculate on the Montenegrin digital currency and generate significant returns.