By George Ward
Joining Georgia’s CBDC Initiative
The National Bank of Georgia (NBG) has enlisted the services of the American blockchain firm Ripples Labs alongside others as its central bank digital currency (CBDC) partner. The move is part of the bank’s effort to advance the development of its “Digital GEL” pilot phase, the country’s CBDC.
The NBG unveiled its strategic vision for achieving its CBDC objectives in an official press release on September 28. The move signaled the NBG’s ambitious plan to usher in a new era, which included the launch of a game-changing initiative: the “Limited Access Live Pilot Environment.”
The project was planned to rigorously examine the potential of a CBDC system’s technological viability and explore the wide range of potential applications it might bring. Explaining its method, the bank emphasized its current stance on a “technologically agnostic” approach.
The NBG’s assertion suggests its willingness to embrace various technological frameworks to realize its Digital GEL project. Hence, the bank chose nine distributed ledger technology firms as pioneer partners for the pilot round.
They are AUGENTIC GmbH, Broxus Holdings Ltd., Bitt Inc. Currency Network Ltd., eCurrency Mint Inc., DCM Corp Limited, FARI Solutions Ltd., Sovereign Wallet Co., Ltd and Ripple Labs, Inc. Each of these firms was recognized for demonstrating commendable technological prowess and a level of capacity and relevant experience that aligns seamlessly with the NBG’s ambitious aspirations.
The Road Ahead
The announcement of Ripple’s involvement in the Digital GEL initiative confirms previous reports. Ripple’s CEO, Brad Garlinghouse, reportedly met with Georgia’s Prime Minister, Irakli Garibashvili, and Vice Prime Minister, Levan Davitashvili, in Davos in May 2022.
Prime Minister Garibashvili revealed that part of Georgia’s strategy is integrating blockchain technology into its public service, making the nation a pioneer. Meanwhile, Ripple’s Vice President for CBDC Engagement, James Wallis, applauded the forward momentum surrounding the Digital GEL initiative.
Wallis also echoed the sentiments expressed in the NBG’s official press release about the project. The Ripple executive stressed that a pivotal moment in the Digital GEL evolution is the bank’s exhaustive research before selecting the nine companies.
This endorsement from a prominent Ripple figure sends a powerful testament to the collective vision driving the Digital GEL project into a new era of financial innovation.
Not Automatic For Ripple
However, including Ripple among the selected partners does not automatically award the contract for executing Georgia’s CBDC project to the US-based blockchain firm. The announcement highlighted this by stating that the NBG will choose a single technology partner once the selection phase is completed.
The selected partner will then move on to the pilot phase, in which the CBDC platform will be thoroughly tested in a controlled, time-constrained live environment. The preceding stage will be a testing ground for the CBDC’s practical applications and potential impact on Georgia’s financial system.
It is worth noting that the bank’s official announcement does not mention the XRP token. This omission suggests that the NBG is willing to explore several technological solutions to pursue a robust and effective CBDC system for Georgia.
The official had previously highlighted Ripple’s efforts in the global CBDC development arena. Data shows that Ripple has moved to advanced stages of negotiation with nearly 30 countries, offering them its CBDC solutions. The company has participated in pilot stages with countries like the Republic of Palau, Bhutan, Colombia, Montenegro, and Hong Kong.