Ripple Leads the Way in Creating First Digital Currency for Montenegro


Recently, Dr Dritan Abazovicwho was the prime minister of montenegro since April 28, 2022, he reported on his meeting with two executives from the FinTech firm Ripple.

Montenegro is a small country in southeastern Europe, which is part of the Balkans.

On December 14, 2021, Ivan Boskovicthe former Director of the Department of Payment Systems and Financial Technology of the Central Bank of Montenegro (“CBM”), published a Article in currency Research titled “Central Bank of Montenegro: How to drive banking and payments innovation in a small developing economy”.

Boskovic wrote:

The transformation of existing conditions matters because it is a fundamental source of long-term growth. Financial services that rely on digital innovations are rapidly transforming markets, and this process has been accelerated by the Covid-19 pandemic. Many countries are now trying to catch up.

Fostering innovation brings with it different challenges depending on the level of development, the size of the market or even the geographical position of a country. Compared to the leaders, small markets face barriers that are much more challenging than those found in advanced economies.

However, some countries like Singapore, Luxembourg and Malta are among the first. Their visionary policies have paid off and they are now treated as role models to many others. The key question is whether their success can be easily followed or copied...

“Small countries often lack the most basic requirements, such as physical and human capital, which becomes more acute as technology develops. Its authorities strive to support innovation and, in particular, the accumulation of innovation capabilities. To design, implement, and coordinate effective policy, policymakers must take into consideration everything that affects the accumulation of all types of capital: physical, human, and knowledge.

He went on to talk about “what the Central Bank of Montenegro (CBM) is doing to implement digital payment innovations.”

Anyway, on January 18, 2023, the Prime Minister of Montenegro reported on his meeting with Brad Garlinghouse, Ripple’s CEO, and James Wallis, Ripple’s VP of CBDC and Central Bank Engagements.

According to Google translation, Dr. Abazović told his Twitter followers:

We discussed the development of a payment infrastructure that would provide greater financial accessibility and inclusion. Montenegro is open to new values ​​and investments… In cooperation with Ripple and the Central Bank, we launched a pilot project to build the first digital currency or stablecoin for Montenegro.

On January 26, 2023, Jeremy Hogan, a partner at the American law firm Hogan & Hogan, explained how the XRP Ledger (XRPL) could work with central bank digital currencies (CBDCs).

The XRP Ledger was created in 2012 by David Schwartz, Jed McCaleb, and Arthur Britto, and XRP is the native currency of the XRP Ledger.

Hogan saying his more than 251 thousand followers on Twitter:

One possibility is that a CBDC is issued in addition to the XRPL as an IOU represented by a specific token. This would allow the CBDC to take advantage of the fast/efficient settlement times of the XRP Ledger.

Another possibility is that the Central Bank of the CBDC could open a “gateway” in the XRPL that allows users to deposit and withdraw the CBDC. This would allow the CBDC to be used alongside XRP and other digital assets on the XRP Ledger.

It is also possible that CBDCs are pegged to XRP and interact with the XRP Ledger as a stablecoin, allowing for fast, cheap and efficient cross-border transactions.

On February 11, 2022, the Digital Euro Association (DEA) announced that it was “delighted” with a new partnership with FinTech firm Ripple.

He Digital Euro Association (DEA) is “a think tank that specializes in central bank digital currencies (CBDCs), stablecoins, crypto assets, and other forms of digital money.” Its mission is to “contribute to public and political discourse through research, education, and by providing a platform and community for policymakers, technologists, and economists to discuss issues related to digital money.” It is “committed to independence and excellence, aiming to set the agenda and shape policy by fostering new and forward-thinking ideas in the field of digital money.”

in a blog post Posted that day, the DEA began by talking about Ripple’s experience with central bank digital currencies (CBDCs):

Ripple, one of the leading providers of enterprise blockchain and cryptographic solutions for cross-border payments, has recently developed a blockchain-based infrastructure to support CBDCs and is engaged with the central bank of Bhutan, among others, to help run its pilot program of CBDC. Ripple is also a member of the Digital Pound Foundation and continues to expand its efforts around CBDCs around the world.

image credit

Featured Image via pixabay