Monday, July 22, 2024
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National Bank of Georgia Advances Digital Lari CBDC with Ripple and Others

The National Bank of Georgia (NBG) is taking significant steps toward the development of its digital lari central bank digital currency (CBDC). The NBG has just announced that it will be advancing its research in a limited-access live pilot environment, involving participation from nine prominent companies, including Ripple Labs. This marks a critical milestone in the nation’s CBDC journey, with one of the participating companies set to progress to the next stage of testing.

The NBG’s interest in a digital lari was initially outlined in a paper released in February, which proposed a two-tier CBDC design, with third-party wallet providers. The digital lari would be programmable and support asset tokenization, opening up a world of possibilities for its application.

Varlam Ebanoidze, NBG’s head of fintech, explained some potential use cases for the digital lari, including facilitating agricultural insurance and automating real estate transactions. Ebanoidze also expressed the desire for interoperability with the digital euro while emphasizing the importance of maintaining monetary freedom.

The journey towards a digital lari began with the NBG’s announcement in May 2021 that it was considering the issuance of a CBDC, albeit without a specific timeline. In January, the NBG reached out to fintech firms to gauge their interest in participating in a limited live pilot, setting the stage for the current development.

Notably, the NBG has been actively engaging with international initiatives related to CBDCs. It recently announced its participation as an observer in the Bank of International Settlements’ (BIS) Project mBridge, which involves several countries, including China, Hong Kong, Thailand, and the United Arab Emirates. The NBG intends to leverage the knowledge and expertise gained from the BIS’s Project Aurum.

Among the participants in the limited-access live pilot, Ripple Labs stands out as a company heavily involved in CBDC projects worldwide. Ripple has been actively participating in CBDC initiatives in various countries, such as Colombia, Montenegro, Hong Kong, Bhutan, and Palau.

As the NBG’s digital lari project progresses, it not only holds promise for the future of Georgia’s financial ecosystem but also contributes to the ongoing global exploration of CBDCs and their potential applications.



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