National Bank of Georgia (NBG) has issued a call for companies in the fintech sector, financial institutions and technology firms to support its efforts to create a digital currency. Georgia’s central bank wants to employ new technologies to raise the efficiency of the country’s payment system and promote financial inclusion.
Georgia’s Central Bank Mulling Digital GEL
NBG is now inviting companies from innovative industries as well as interested financial institutions to join a public-private partnership tasked to facilitate the adoption of a central bank digital currency (CBDC). The bank is considering launching the digital version of the national fiat, Georgian lari (GEL), as a publicly available coin that will have legal tender status.
The digital GEL can be used to settle payments or as a store of value, the National Bank of Georgia explained in an announcement published on its website. But what its management really hopes to achieve with the currency is to “unlock the tremendous value of innovative business models for the benefit of society” and “reach previously unbanked populations.” The bank further elaborates:
The rise of digital technologies underscores the necessity to update central bank money… to better serve the digital economy and increase public policy efficiency.
NBG also notes that it supports a regulatory sandbox approach to the development of the digital GEL. The bank plans to use its Regulatory Laboratory, a framework allowing financial sector entities under its supervision to test innovative services and products in real-time and controlled environments. The financial authority believes this will help it to develop its new regulations and update the legal framework to govern the CBDC.
In its project announcement, the National Bank of Georgia recognizes the potentially disruptive nature of the technology involved in CBDCs and the need for “sound risk management during the development…