The National Bank of Georgia is looking to launch a central bank digital currency (CBDC)
In a statement published in April, the central bank announced a central bank digital currency (CBDC) had the potential to enhance Georgia’s payment system and improve financial inclusion. The project is named after the currency code for the Georgian lari, GEL.
National Bank of Georgia looking into launching a CBDC
Georgia’s central bank, the National Bank of Georgia, has announced that it is considering launching a Central Bank Digital Currency (CBDC). The announcement includes the motivations behind the review, namely that it is a more efficient means of payment and will support financial inclusion.
The digital version of the Georgian lari (GEL) will help open up value in business models and boost the national economy, the announcement states. To this end, it shaped its strategy around the Bank for International Settlements (BIS) guidelines for CBDCs.
Features the bank is focusing on including a modular approach, retail convenience, interoperability, and offline payments, among many others. Such a comprehensive design would require a lot of research and development time, so it’s unlikely an update will be forthcoming anytime soon.
The bank is inviting tech companies, fintech companies, and financial institutions to participate in the process. This public-private partnership will focus on technology, regulatory, and financial issues that need to be addressed before launch.
The Bank will test the CBDC in a live and controlled environment and use the Open Regulatory Framework tools for development. This is to ensure that it can manage risk and design a solid user experience.
The National Bank of Georgia also notes that CBDCs may become essential for the financial ecosystem and spur private innovation. However, it acknowledges that is a complex process.
Georgia joins the growing ranks of countries looking to launch a CBDC. The Eastern European nation, like others before it, has begun to see the potential benefits that can come from a blockchain-based payment system.
These countries have also partly taken to in a bid to stem the rising tide of cryptocurrencies, which are quickly taking to the mainstream. It looks increasingly likely that most economies will have a CBDC supporting its national fiat currency, with cryptocurrencies acting as a separate asset class.
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