By
Godfrey Benjamin
April 24th, 2024
Ripple said that the CBDC project will involve several stages such as identifying the practical application of the CBDC, simulating its circulation, as well as its use under controlled conditions.
In an interesting development on Tuesday, April 11, blockchain startup Ripple joined hands with the Central Bank of Montenegro (CBCG) to build a pilot program for the launch of the country’s central bank digital currency (CBDC).
So far, Montenegro has been using the Euro as its currency ever since its introduction in 2022. As part of their partnership, Ripple will help Montenegro in identifying the practical application of a CBDC.
As we know, more than a hundred countries worldwide have been working on their respective CBDCs. Strong economies like China and the Eurozone have already geared up their efforts in launching CBDCs. Different countries are approaching their CBDC initiatives with different objectives. This includes the widening of financial inclusion, improving payment security, modernizing monetary policy as well increasing cross-border payment efficiency. Commenting on the development, CBCG Governor Radoje Žugić noted:
“Through the project, the CBCG will work with the Government of Montenegro and Montenegro’s academia to create a practical digital currency or secure currency solution to test the main blockchain technology’s functionality and potential. It will also analyse the advantages and risks that CBDCs or national stablecoins could pose concerning electronic means of payment availability, security, efficiency, compliance with regulations, and most importantly, the protection of end users’ rights and privacy.”
Different Stages of the CBDC Launch
Ripple stated that the project will undergo several stages of implementation. This includes identifying the practical application of the CBDC, simulating its circulation, as well as its use under controlled conditions. James Wallis, Ripple’s Vice President of Central Bank Engagements & CBDCs said that they have planned a sandbox stage for the pilot launch of the CBDC. He added:
“Ripple has a proven track record of successfully connecting disparate payment systems and championing blockchain’s utility to issue Central Bank Digital Currencies and solve for global payments to hundreds of financial institutions around the world. We are pleased that the CBCG has chosen Ripple to help launch its first digital currency and further address the country’s core financial objectives.”
This is certainly not the first time that Ripple has been working on a CBDC project. Ahead this year, the company also released a CBDC whitepaper.