Today, the Central Bank of Montenegro (CBCG) announced a new collaboration with blockchain and crypto firm Ripple to develop a digital currency strategy and pilot for a central bank digital currency (CBDC) or national stablecoin. The central bank is deliberating between the two options, but a national stablecoin seems more likely due to the country’s unique currency situation.
In 2002, the country decided to unilaterally adopt the Euro as its de facto domestic currency despite not being a member of the European Union, so many will wonder whether a true CBDC would be possible.
“As a central bank committed to following up-to-date national banking trends, the CBCG is actively ensuring it maintains an efficient financial system,” said the central bank Governor, Radoje Žugić. He also noted that the project will unite monetary authorities, government officials, and Montenegro’s academia “to create a practical digital currency or secure currency solution to test the main blockchain technology’s functionality and potential.” This will involve weighing the benefits and costs of CBDCs and stablecoins for payment systems, regulatory compliance, and users’ privacy.
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