The new project with Ripple will go through several stages for a CBDC, including exploring its practicality and simulating its circulation and use under controlled conditions.

The Central Bank’s latest announcement came amid growing interest in digital payments.

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Radoje Zugic, governor of the Central Bank of Montenegro, welcomed the partnership with Ripple and said 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”.

“Through the project, the BDCG 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”, Zugic noted.

According to Atlantic Council, eleven countries have already launched their own CBDCs, while others, including the US, France and Germany, are working on developing one.

Ripple is a crypto solutions company that seeks to increase access to inclusive and scalable financial systems while leveraging carbon-neutral blockchain technology.

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James Wallis, Ripple’s vice president of Central Bank Engagements & CBDCs, commented: “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

“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”, Wallis said.