Ripple Pens Deal With Montenegro Central Bank for CBDC Pilot

Ripple currently offers services for “minting, managing, transacting, and destroying CBDCs,” the company said

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Blockchain provider Ripple has sealed a deal with the Central Bank of Montenegro to launch a pilot program for the country’s CBDC, the company announced Tuesday. 

The CBDC, or central bank digital currency, which the central bank is calling a “national stablecoin,” is intended to promote financial stability and access to the banking system in Montenegro, the central bank said in a statement

Central bankers opted to partner with Ripple because of the blockchain’s “proven track record of successfully connecting disparate payment systems and championing blockchain’s utility,” said James Wallis, Ripple’s vice president of central bank engagements and CBDCs. 

Ripple currently offers services for “minting, managing, transacting, and destroying CBDCs,” the company said. By destroying the currency after its successful creation, Ripple hands off full control of the CBDC to the bank, it said. 

Montenegro, where Terraform Labs founder Do Kwon was arrested last month, has historically been favorable to the crypto industry. In 2022, the country made Ethereum founder Vitalik Buterin a citizen in an effort to boost its status as a hub for blockchain innovation. 

The Balkan nation has a relaxed approach to crypto regulation and has supported businesses accepting digital currencies as a means of payment since 2020, researchers from Mundo said in a blog post. 

Montenegro is just one of several countries looking to ramp up its digital banking system with a CBDC. Brazil has said its pilot CBDC will be rolled out before the end of the year. The Bank of Japan is working on its proof of concept and trial run, which will include participation from three of the country’s largest banks, officials said. 

In the US, opinions are mixed about the potential pros and cons of a CBDC. Proponents argue it is a necessity to remain a dominant economy, while others argue that the lack of privacy poses a problem. 

The Federal Reserve has been investigating the potential role of a CBDC and what it might look like in practice through its FedNow instant payments program, set to launch this summer

Montenegro’s central bank will be working with Ripple’s team on establishing a framework for its CBDC and later launching a pilot program, officials said. A timeline for when the currency will begin testing was not provided.


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