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 countryโs 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 ลฝugiฤ noted:
โThrough the project, the CBCG will work with the Government of Montenegro and Montenegroโs academia to create a practical digital currency or secure currency solution to test the main blockchain technologyโs 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 usersโ rights and privacy.โ
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, Rippleโs Vice President of Central Bank Engagements & CBDCs said that they have planned a sandbox stage for the pilot launch of the CBDC. He added:
โRipple has a proven track record of successfully connecting disparate payment systems and championing blockchainโs 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 countryโs core financial objectives.โ
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.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
