On Twitter, the Prime Minister of Montenegro, Dritan Abazovi, made the announcement that his nation is exploring the possibility of establishing a digital currency in collaboration with Ripple. At Davos, Abazovi had a meeting with the CEO of Ripple, Brad Garlinghouse, and the vice president of Ripple, James Wallis.
Ripple has appointed Wallis to the position of vice president for central bank interactions and CBDCs. According to something that Abazovi remarked in a Twitter thread, it seems that when he made his statement, he had something similar to a central bank digital currency (CBDC) in mind.
Due to the fact that Montenegro does not yet have its own national currency, the precise nature of the prospective future digital currency is unknown at this time.
Although Montenegro is neither a member of the Eurozone nor the European Union (EU), the euro has been used as the country’s currency since its introduction in 2002. The Balkan country of Montenegro has been trying to join the European Union since 2008.
Montenegro’s mission to get into digital finance
Ivan Boskovic, formerly of the Central Bank of Montenegro (CBM), released Central Bank of Montenegro: How to Boost Banking and Payment Innovation in a Small Developing Economy in currency back in 2021.
According to what Boskovic said, the transformation of pre-existing situations is significant since it is a primary driver of sustained economic expansion.
The spread of the Covid-19 pandemic has sped up the pace of the fast transformation of markets that are being brought about by financial services that are dependent on technological breakthroughs.
He went on to say that the degree of development, size of the market, and even the geographical location of a nation all play a role in the unique hurdles that must be overcome in order to foster innovation successfully.
According to him, tiny markets encounter obstacles that are far more difficult to overcome than those that may be found in economies that have already achieved a high level of development.
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After the first announcement of the partnership with Ripple on January 18, it took a few days for the word to spread throughout the rest of the world.
In a recent interview, a Ripple advisor said the company would be increasing its CBDC operations in 2023, with many experiments already underway and a particular mention of Bhutan and Palau.
In addition to being an early supporter of the Digital Dollar Project and the Digital Euro Association, this firm was a founder member of both in February of 2022.
Ripple’s SVP and MD, Brooks Entwistle, also shared that the business is adopting a focused approach, with smaller central banks showing special interest rather than trying to create a solution for every central bank in the world. The Republic of Palau and the Kingdom of Bhutan have announced that they will work with Ripple.
No one knows yet how XRP or the XRP Ledger will factor into the pilot project in Montenegro. In this specific instance, though, Entwistle was prepared with an overarching explanation.
