(Kitco News) – The Baltic country of Montenegro is throwing its hat into the central bank digital currency (CBDC) ring and has tapped the remittance-focused crypto company Ripple to help develop its digital currency.
According to a Twitter announcement made by Montenegro’s Prime Minister Dritan Abazović, he met with Ripple CEO Brad Garlinghouse and James Wallis, vice president of Ripple’s central bank engagements and CBDCs division, during the World Economic Forum 2023 in Davos to “discuss the development of a payment infrastructure that would provide greater financial accessibility and inclusion.”
A follow-up Tweet from Abazović further specified that the country was working in conjunction with its central bank to develop a new digital currency that can be used for payments in the country.
“In cooperation with @Ripple and the Central Bank, we launched a pilot project to build the first digital currency or stablecoin for Montenegro,” Abazović tweeted.
At this point, the specifics of the new digital currency are unclear since Montenegro has no national currency of its own. The country has utilized the euro since 2002, when the transnational currency was first introduced, despite the fact that it is not a European Union member and does not belong to the Eurozone. Montenegro applied for EU membership in 2008 but has yet to be granted membership.
Despite its small size, the country has seen its stature within the crypto ecosystem increase over the past year due to its openness to the nascent asset class, which has been integrated into several prominent industries in the country.
As one of the more financially liberal nations in the Balkans, Montenegro has no special requirements for using cryptocurrency as a form of payment, including its use in making real estate purchases. Those looking to buy property in Montenegro using cryptocurrencies face minimal barriers to doing so as long as the deal is sanctioned by a certified notary.
And in April 2022, the country held a panel titled Future Now! where panelists – which included Ethereum co-founder Vitalik Buterin, Ethereum researcher Vlad Zamfir, University of Memphis professor of law Boris Mamlyk and Minister Spajić – discussed the legality of blockchain identity, smart contracts in government and a variety of other topics.
During the event, Montenegro awarded Buterin citizenship as part of an effort to entice crypto investors into the country.
Ripple has been increasing its activity related to the development of central bank digital currencies since piloting a private version of the XRP Ledger – which provided central banks with a platform to securely issue CBDCx – in March 2021.
In September 2021, Ripple Labs partnered with the Royal Monetary Authority of Bhutan to pilot test the creation of a digital ngultrum, which is intended to help the south-central Asia kingdom improve cross-border payments. Two months later, the company partnered with the Republic of Palau to help the Pacific island develop its own climate-friendly digital currency.
In September 2022, Ripple was selected as one of the founding members of a “Technical Sandbox Program” launched by the Digital Dollar Project that is designed to explore the potential technical and business ramifications of a CBDC in the U.S. The firm also joined the European think tank Digital Euro Association in February 2022 to help facilitate the development and growth of CBDCs and the Digital Euro.
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