Georgia to pilot digital currency in retail next year
Georgia’s central bank is moving forward with its digital currency project. The monetary authority is preparing to launch the CBDC as early as next year and plans to use the blockchain-based version of the national fiat, the Georgian lari, to facilitate retail sales.
Georgia to launch Digital Lari in 2022
The National Bank of Georgia (NBG) intends to pilot its own digital currency in a program slated for next year, Vice President Papuna Lezhava revealed this week. Speaking to reporters on Tuesday, the senior official noted that 85% of the world’s central banks are already working on state-issued digital currencies. Quoted by the Interfax news agency, Lezhava said:
Some are in the research phase, some are in testing, some have already implemented it, notably China and the Bahamas. We also want to be at the forefront of this trend.
The banker further clarified that a central bank digital currency (CBDC) is not a cryptocurrency but rather “an evolution of money”. Nonetheless, the digital Georgian lari will be based on the same technology that underlies the decentralized digital currency, the blockchain. The lari coin, however, will not be mined or subject to market speculation, Lezhava noted.
The NBG will be the sole issuer of Georgia’s sovereign digital currency, the bank representative said. Despite its differences with cryptocurrencies, digital lari will be able to compete with them by facilitating various services. In the early stages of its introduction, the Tbilisi government plans to use it in retail, for example.
Georgian digital currency will be faster and cheaper than traditional payment methods
The officials of the CBDC project believe that the new currency will help improve the efficiency of the country’s payment system and promote financial inclusion in Georgia. Financial authorities hope that it will become a faster and cheaper means of payment than traditional means of payment.
The digital lari will also operate around the clock and its transactions will not require an internet connection, added Papuna Lezhava. He also highlighted “its main advantage” – the Georgian digital coin will be open and compatible with other technologies, unlike current paper money and payment systems.
In May of this year, the National Bank of Georgia called on fintech companies, financial institutions and tech companies to support its efforts to create a national digital currency. Stakeholders have been invited to join a public-private partnership tasked with facilitating the adoption of digital lari in the country’s economy.
The US Federal Reserve, the European Central Bank, and the Bank of Russia are among dozens of monetary authorities around the world working to develop and issue CBDCs. The People’s Bank of China has arguably the most advanced project, with numerous digital yuan trials already underway across the country.
Do you think Georgia will be successful in its plan to launch a central bank digital currency? Let us know in the comments section below.
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