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Georgia set to tap Ripple to advance its CBDC research

In this post:

  • The National Bank of Georgia has announced that it will leverage Ripple to advance its CBDC research.
  • Ripple and its role in interoperability and global collaboration.

The National Bank of Georgia (NBG) has embarked on an ambitious journey to explore the development of a central bank digital currency (CBDC), and recent developments indicate significant progress in this endeavor. In a bid to advance their research and testing, the NBG has launched a limited-access live pilot program, a pivotal step in the journey towards a digital lari. This initiative has garnered the participation of nine companies, one of which will be selected to proceed to the next phase of testing. Notably, Ripple Labs, a prominent player in the blockchain and digital currency space, is among the chosen participants, underlining the project’s significance.

Georgia to make its CBDC a two-tier design

The NBG’s approach to a digital lari involves a two-tier design, where third-party providers will offer digital wallets. This design is intended to make the CBDC programmable and capable of supporting asset tokenization, opening up a wide array of possibilities for its use in various sectors of the economy. The envisioned use cases for a digital lari are diverse and promising. For instance, it could revolutionize the provision of agricultural insurance, bringing efficiency and accessibility to this critical sector.

Additionally, the automation of real estate transactions is on the horizon, potentially simplifying complex processes and reducing paperwork. These use cases demonstrate the transformative potential of a digital lari in enhancing economic activities within Georgia. One key aspect of the bank of Georgia’s vision is its desire for interoperability with the digital euro. This aspiration reflects the bank’s intention to align with European Union standards while maintaining monetary independence.

Achieving interoperability with the digital euro could pave the way for seamless cross-border transactions and financial interactions between Georgia and EU member states, fostering economic integration and cooperation. The journey towards exploring CBDCs by the NBG began in May 2021 when the bank first announced its consideration of issuing a digital lari. However, at that time, no specific timeline for the launch was provided, and it was clear that careful deliberation and planning were essential for such a significant financial innovation.

Ripple and its role in interoperability and global collaboration

Subsequently, in January, the NBG took a vital step by soliciting expressions of interest from fintech firms, laying the foundation for the limited live pilot program announced in September. In September, the NBG made another notable move by joining the Bank of International Settlements (BIS) Project mBridge as an observer. This collaborative project involves cooperation with countries such as China, Hong Kong, Thailand, and the United Arab Emirates, marking a significant global initiative in the realm of digital currencies. By participating in this project, the NBG aims to leverage the knowledge and expertise offered by BIS’s Project Aurum, further enhancing its capabilities and insights in the CBDC space.

Apart from Ripple Labs, the pilot program boasts the participation of various other companies specializing in fintech and blockchain solutions. These include Augentic, Bitt, Broxus Holdings, Currency Network, DCM, eCurrency Mint, FARI Solutions, and Sovereign Wallet. The inclusion of these companies signifies a collaborative approach to exploring and developing a digital lari, with each entity bringing its unique expertise to the table. Ripple Labs, in particular, is a noteworthy participant in the pilot program. The company has established itself as a leading player in the CBDC landscape, actively engaged in projects across the globe.

Its involvement in countries like Colombia, Montenegro, Hong Kong, Bhutan, and Palau demonstrates its commitment to advancing the adoption of digital currencies and blockchain technology on a global scale. The partnership between Ripple Labs and the NBG could yield valuable insights and innovations in the development of the digital lari. The National Bank of Georgia’s exploration of a central bank digital currency, the digital lari, represents a significant stride towards modernizing the country’s financial infrastructure.

The two-tier design, partnerships with fintech companies, and the pursuit of interoperability with the digital euro showcase the NBG’s forward-thinking approach. By participating in the limited-access live pilot and collaborating with international organizations like the Bank of International Settlements, the NBG is positioning itself at the forefront of the evolving landscape of digital currencies and blockchain technology. As developments unfold, the digital lari could play a transformative role in Georgia’s economic landscape, offering new possibilities and efficiencies for businesses and individuals alike.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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