Blockchain payments company Ripple, which often dominates the headlines across the crypto space due to its long-standing legal feud with the U.S. Securities and Exchange Commission (SEC), recently announced that it had signed an agreement with the Central Bank of Montenegro (CBCG) to create a pilot program for a central bank digital currency (CBDC).
The partnership, first teased in January this year, aims to develop a national currency for a nation that currently uses the euro.
Ripple’s native token XRP rose to $0.52 on April 11 on the back of the development alongside a broader crypto market rally.
Ripple Is Helping Montenegro Pilot A CBDC
According to a Tuesday announcement, Ripple has partnered with the Central Bank of Montenegro to develop a Montenegrin CBDC. The pair will further devise a plan to stimulate the circulation of the CBDC within the country, which has been using the euro as its de facto currency since 2002.
The governor of the central bank revealed in a statement that it plans to collaborate with the government as well as the academic community to “analyze 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.”
Montenegro’s Prime Minister, Dritan Abazovic, first announced the partnership with Ripple back in January, as ZyCrypto reported.
Commenting on the deal with the Montenegrin Central Bank, Ripple’s Vice President of Central Bank Engagements & CBDCs James Wallis stated:
“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.”
Ripple Has Been Involved With CBDCs Before
CBDCs are digital assets issued on a centrally operated ledger and pegged to the price of a nation’s main currency.
Although Ripple’s XRP cryptocurrency is not a CBDC, its blockchain is designed for institutions and enterprises, making it an attractive choice for governments and central banks looking to issue a CBDC. Bhutan and Palau have both tapped Ripple for their CBDC projects.
Ripple also became involved with the Digital Pound Foundation — an NGO researching a CBDC for the U.K., in October 2021.
The XRP price has been on a wild rollercoaster ride in recent months, thanks in large part to expectations that Ripple will win the case against it by the SEC. With Ripple expanding its footing in the CBDC space amid speculations that summary judgement is just around the corner, XRP holders are now bracing for a new upsurge as the market sentiment turns super bullish, with bitcoin recently crossing the crucial $30,000 mark.