Montenegro Joins Forces with Ripple: A Digital Currency Revolution on the Horizon?

The recent development surrounding CBDCs and partnership with the renowned crypto company can only mean that Montenegro is serious about becoming the central crypto location in the Balkans, and even Europe. If the Montenegrians manage to successfully launch a CBDC as the first one in Europe, their status as the crypto capital is almost guaranteed. We’re following this topic with great interest and are rooting for our Balkan neighbors to launch a successful CBDC program. 

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Montenegro Joins Forces with Ripple

Illustration: MilicaM

The Montenegro Central Bank (CBCG) has partnered with Ripple, a business-focused cryptocurrency and blockchain solutions provider, to create a strategy and trial initiative for introducing the nation’s inaugural digital currency as a Central Bank Digital Currency (CBDC) or a national stablecoin. In line with the CBCG’s key goals, the launch of this digital currency signifies further progress in the digitalization of financial services and promoting enhanced financial access for the people of Montenegro. 

All the rage around CBDCs 

In recent times, the Bank of England initiated discussions regarding a potential digital pound, while the European Central Bank suggested that a digital euro might be introduced within four years, and the Reserve Bank of India commenced digital rupee trials for both large-scale and individual sectors. 

Although not every CBDC project is founded on a blockchain or distributed ledger technology (DLT), a Citi Global Perspectives and Solutions white paper anticipates that, by 2030, CBDCs valued at up to $5 trillion could be in circulation in leading economies, with half of them connected to DLT. During the same period, over two billion individuals might be utilizing CBDCs. 

As per the study titled “Money, token, and games: Blockchain’s next billion users and trillions in value,” the world is approaching a turning point where blockchain’s anticipated potential will be achieved. 

But what is actually a CBDC?  

A CBDC represents a digital version of a nation’s fiat currency. In essence, these are government-backed digital currencies explicitly recognized for settling public and private debts. As a digital form of fiat money, they have the full support and trust of the issuing government. CBDCs strive to merge the advantages of both realms: the convenience and safety of digital transactions along with the centralized management of the currency’s monetary policy. 

Technical details of the cooperation 

The CBCG, in collaboration with Montenegro’s government and academic institutions, aims to develop a functional digital or secure currency solution, testing the primary capabilities and potential of blockchain technology. 

Jeremy Hogan, an attorney and XRP enthusiast who closely monitors the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple suggests that the XRP Ledger (XRPL) could be integrated with Ripple’s CBDC initiative. 

One potential scenario is that a CBDC could be issued on the XRPL as an IOU (I owe you), represented by a distinct token. This would enable the CBDC to benefit from the XRPL’s rapid and efficient settlement times. 

Alternatively, the CBDC’s Central Bank could establish a ‘gateway’ on the XRPL, allowing users to deposit and withdraw the CBDC. This would enable the CBDC to be used alongside XRP and other digital assets within the XRP Ledger. 

Why a CBDC, though, Montenegro? 

As progress on an e-euro under the European Central Bank’s supervision is unhurried, Montenegro might potentially be the initial nation to have a digitally represented euro with governmental assurance and accountability. Radoje Zugic, the Central Bank of Montenegro’s chief, mentioned that they are keeping an eye on domestic and global financial trends, aiming to “enhance an effective financial system” via a CBDC.  

The initiative will undergo multiple phases, such as determining the practical implementation of a digital currency or nationwide stablecoin, and designing a simulation of its distribution and utilization in a regulated environment. 

James Wallis, Ripple’s VP of Central Bank Engagements & CBDCs, stated that the Central Bank of Montenegro is advancing its financial infrastructure through digital transformation and tackling some of the most significant global financial issues, including financial inclusion.  

Ripple has a demonstrated history of effectively bridging different payment systems and promoting the use of blockchain for issuing Central Bank Digital Currencies, as well as addressing global payment challenges for numerous financial institutions worldwide. Ripple is delighted that the CBCG has selected them to assist in the launch of Montenegro’s inaugural digital currency, further addressing the nation’s key financial goals. 

Meanwhile, Ripple identifies over 100 countries globally showing interest in an autonomous digital currency. In addition to Montenegro, Ripple, and XRP are collaborating with the Republic of Palau and Bhutan on CBDC initiatives. 

So far, Ripple and the central bank have not disclosed any technical specifics. A frequent topic of debate for CBDCs is whether government-backed stablecoins should permit anonymous usage for citizens, similar to cash. Another contested issue is if a CBDC should genuinely be decentralized like Bitcoin (BTC), based on blockchain technology, or if a centralized authority should be established. 

Montenegro’s regulatory sandbox 

Cryptocurrency is a novel concept for all nations, with some adopting a pro-business approach, others overlooking it, and some unsure of how to handle it. Historically, the Balkans have been resistant to crypto, but Montenegro was among the first in the area to shift this perspective. 

While this is a new development for the country, the Montenegrian Security Exchange Commission has embraced the cryptocurrency movement by establishing a Regulatory Sandbox. The purpose of the regulatory sandbox is to offer a more effective method for innovative companies to engage with regulatory authorities. 

This encompasses a trial for companies wanting to experiment with groundbreaking products, services, or business models. The FinTech Sandbox serves as a consolidated platform that nurtures and links the FinTech community, involving stakeholders, FinTech startups, financial institutions, regulators, service providers, mentors, and investors. 

The primary advantage of the sandbox is that it permits participants to function in the capital and financial market without a license for a trial duration for certain products or services, while also gaining lawful access to banking, government services, and financial engineering services. 

In other words, for instance, you can initiate the operation of a cryptocurrency wallet from Montenegro prior to obtaining your license, allowing you to test your technology. The revenue generated during this period can then be utilized to cover the costs of the license and any professional fees required to acquire it. 

Therefore, the sandbox is not limited to cryptocurrency firms alone but extends to various fintech endeavors. 


For quite some time now, Montenegro has tried placing itself as the Balkan trailblazer when it comes to crypto and technology. While it may lag behind some of its neighbors and other Western countries, the fact that they have favorable regulation, and has already held a few central crypto meetups, speaks volumes about the country’s plans going forward.  

Dino Kurbegović is a project coordinator and an investor and technology enthusiast with years of experience in managing complex projects. His journey into content writing began in 2014, covering finance, investing, crypto, technology and complex technical topics.