Central Bank of Montenegro Signs Agreement with Ripple to Develop a CBDC Digital Currency Strategy and Pilot

11th April, 2023 - The Central Bank of Montenegro (CBCG) has agreed to collaborate with the enterprise crypto and blockchain solutions provider Ripple to develop a strategy and pilot programme to launch the country’s first digital currency in the form of a Central Bank Digital Currency (CBDC) or national stablecoin. 

The CBCG are among many central banks working to create CBDCs, including the European Central Bank, who are currently progressing with the Digital euro. The CBCG's stated objective with the digital currency is to increase financial accessibility for Montenegro's citizens.

CBCG Governor Radoje Žugić noted that “As a central bank committed to following up-to-date national banking trends, the CBCG is actively ensuring it maintains an efficient financial system. We look forward to collaborating with Ripple on the pilot project for creating CBDC or stablecoin. 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.”

The project will go through several stages, including identifying the practical application of a digital currency or national stablecoin and the design to simulate its circulation and use under controlled conditions.

“The Central Bank of Montenegro is bringing the next level of digital transformation to its financial infrastructure and addressing some of the world’s biggest financial challenges, including financial inclusion,” said James Wallis, Ripple’s Vice President of Central Bank Engagements & CBDCs.

"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,” he added. 

The price of Ripple's XRP altcoin is being closely watched by crypto industry observers, thanks to the SEC's ongoing lawsuit against the organisation. It soared in value by 55% during 2023 amid rumours that Ripple would emerge victorious, including 43% during March alone. No ruling has yet been announced, however.