The National Bank of Georgia said that it is considering launching a central bank digital currency, or CBDC.
In an announcement on Wednesday, the central bank hinted at the issuance of a CBDC in an effort “to enhance efficiencies of the domestic payment system and financial inclusion.” The NBG said it would be inviting fintech firms and other financial institutions to participate in the project, named “Digital Gel” after the symbol for the country’s fiat currency, the lari.
“CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society,” says the announcement. “The introduction of CBDC could increase financial intermediation efficiency, help introduce new financial technologies, facilitate financial inclusion, and reach previously unbanked populations.”
However, the bank mentioned the possibility of risks in the launch of a CBDC in Georgia given the “new and potentially disruptive technology.” The NBG said it may conduct extensive testing of the CBDC in a controlled environment to ensure a smooth rollout, but it did not provide any details regarding a timeline for launch.
With a population of roughly 4 million and a gross domestic product of approximately $15 billion, a nation like Georgia falls at the smaller end of countries exploring CBDCs. The Bahamas officially rolled out its Sand Dollar central bank digital currency in October 2020, while China has been piloting its digital yuan in select cities prior to a full-scale launch. In the United States, Fortune 500 company Accenture announced this week it would be partnering with the Digital Dollar Foundation to conduct CBDC trials.