According to a recent press release, “The Central Bank of Montenegro (CBCG) has agreed to collaborate with the enterprise crypto and blockchain solutions provider Ripple to develop a strategy and pilot programme to launch the country’s first digital currency in the form of a Central Bank Digital Currency (CBDC) or national stablecoin.” The press release notes that the project will analyze the benefits and risks of CBDCs, including “payment availability, security, efficiency, compliance with regulations, and most importantly, the protection of end users’ rights and privacy.”
In related news, the Bank for International Settlements (BIS) recently published a BIS Bulletin titled Stablecoins versus tokenised deposits: implications for the singleness of money. The bulletin compares asset-backed stablecoins to CBDCs with a focus on “singleness,” a key characteristic of money that “ensures that monetary exchange is not subject to fluctuating exchange rates between different forms of money” and enables “an unambiguous unit of account” that “allows money to serve its role as a coordinating device for economic activity.” The bulletin describes singleness as “[a] cornerstone of the modern monetary system.” According to the bulletin, stablecoins “may entail departures in their relative exchange values” in violation of singleness, and CBDCs or “tokenized deposits” are more conducive to singleness when compared to stablecoins. The bulletin also highlights other potential advantages of CBDCs, including “expanded functionality by building on the capacity of programmable ledgers to introduce contingent execution and composability of transactions.”
