Georgia’s central bank has revealed that it is looking to launch a central bank digital currency (CBDC), and is inviting relevant entities to help with the effort.
Georgia’s central bank, the National Bank of Georgia, has announced that it’s looking into launching a Central Bank Digital Currency (CBDC). The announcement covers the motivations behind the consideration, namely that it’s a more efficient means of payment and will support financial inclusion.
The digital version of the Georgian lari (GEL), the announcement states, will help unlock value in business models and boost the national economy. To this end, it has formed its strategy around the Bank for International Settlements (BIS) guidelines for CBDCs.
The features that the bank is focusing on include a modular approach, retail convenience, interoperability, and offline payments, among many others. Such a comprehensive design will require a lot of time for research and development, so it isn’t likely that there will be updates any time soon.
The bank is inviting technology firms, fintech companies, and financial institutions to participate in the process. This public-private partnership will focus on tech, regulatory, and financial issues that need to be addressed before launch.
The bank will test the CBDC in a live and controlled environment and utilize 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 it’s a complex process.
Georgia joins many others in considering CBDC
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.
PwC recently released a report that ranked the various CBDCs that have launched or are in testing mode. The Bahamas and Cambodia took the top spots as a result of the fact that they have already launched, with China’s digital yuan coming in third.
While China is the biggest economy that is working with a CBDC, it is also still in the piloting phase. The CBDC will likely launch at the end of the year, following more pilot programs in major cities.