Montenegro's central bank teams up with Ripple on digital currency pilot project

Montenegrin Prime Minister Dritan Abazović has announced on Twitter that his country is pursuing a digital currency in conjunction with Ripple. Abazović met with Ripple CEO Brad Garlinghouse and vice president James Wallis at Davos.

Wallis is Ripple's vice president for central bank engagements and CBDCs. Abazović apparently had something like a central bank digital currency (CBDC) in mind in his announcement, as he stated in the thread:

“In cooperation with @Ripple and the Central Bank, we launched a pilot project to build the first digital currency or stablecoin for Montenegro.”

The exact nature of the potential future digital currency is unclear, however, as Montenegro currently has no national currency of its own. The Balkan nation has used the euro as its currency since 2002, when the transnational currency was introduced, despite the fact that Montenegro is neither part of the Eurozone nor a European Union (EU) member. Montenegro applied for EU membership in 2008.

As per the PM of Montenegro, the nation launched a pilot project to build the first digital currency or stablecoin for Montenegro, in cooperation with@Ripple and the Central Bank. https://t.co/osWT3wocPk

— Leonidas (@LeoHadjiloizou) January 29, 2023

The Montenegrin government has been angling for a place in the cryptocurrency industry for months. It has developed a reputation for its acceptance of crypto, and it held a panel titled Future Now! in April that Ethereum co-creator Vitalik Buterin attended. Buterin was reportedly granted Montenegrin citizenship at that time.

Related: ECB official urges CBDC development for the good of cryptocurrency and consumers

The project with Ripple was widely covered by local news outlets when the announcement was made on Jan. 18, but it took several days for news of the project to reach the international community.

A Ripple adviser promised new activity in CBDC deals on the part of the company last year, mentioning Bhutan and Palau specifically among “several pilots in progress.” The company is also a founding member of the Digital Dollar Project and it joined the Digital Euro Association in February 2022.