The digital lari is envisioned as offering interoperability with a digital euro while protecting monetary freedom while the nation is being evaluated for EU membership.
In a limited-access live pilot environment, the National Bank of Georgia (NBG) has declared that it will advance its research on a digital lari central bank digital currency (CBDC). Nine businesses, including Ripple Labs, will participate in the initiative, and one of them will be chosen to go to the subsequent testing round.
The NBG claimed that it was proposing a two-tier design for the CBDC, with wallets provided by a third party, in a document published in February. It would allow for the asset tokenization process and be programmable.
Varlam Ebanoidze, the head of fintech at NBG, stated in an interview from June that the supply of agricultural insurance and the automation of real estate transactions are two examples of use cases for a digital lari, or GEL. And he said:
“We are considering joining the European Union, and while doing so, we want to be compatible with the digital euro, we also want monetary freedom.”
The NBG stated in May 2021 that it was considering issuing a CBDC but did not provide a time frame. The NBG made a public announcement in January asking fintech companies to express their interest in taking part in a small live test.
As part of the Project mBridge of the Bank of International Settlements (BIS), which also includes China, Hong Kong, Thailand, and the United Arab Emirates, the NBG announced on September 8 that it would take part as an observer alongside roughly ten other countries. Additionally, it stated that it would “leverage knowledge and expertise” from Project Aurum run by the BIS.
Ripple isn’t the only company taking part in the trial; Augentic, Bitt, Broxus Holdings, Currency Network, DCM, eCurrency Mint, FARI Solutions, and Sovereign Wallet are all involved. It is well-known that Ripple participates in CBDC projects all over the world, working in places like Colombia, Montenegro, Hong Kong, Bhutan, and Palau.