As the country is considered for EU membership, the digital lari is seen as a way of providing interoperability with a digital euro but preserving monetary freedom.
The National Bank of Georgia (NBG) has announced that it will advance its research on a digital lari central bank digital currency (CBDC) in a limited-access live pilot environment. Nine companies, including Ripple Labs, will take part in the project and one of them will be selected to move forward to the next stage of testing.
In a paper released in February, the NBG stated that it was considering a two-tier design for its CBDC, with wallets provided by a third party. It would be programmable and support asset tokenization.
NBG head of fintech Varlam Ebanoidze said in an interview in June that use cases for a digital lari, or GEL, include provision of agricultural insurance and automation of real estate transactions. He added:
“We are thinking about integration into the European Union and we want to be interoperable with the digital euro, but have monetary freedom.”
The NBG announced that it was considering issuing a CBDC in May 2021, without providing a timeline for it. The NBG announced in January that it was soliciting expressions of interest from fintechs to participate in a limited live pilot.
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The NBG announced on Sept. 8 that it would participate as an observer in the Bank of International Settlements’ (BIS) Project mBridge, which involves China, Hong Kong, Thailand and the United Arab Emirates, joining about ten other observer countries. It said it would also “leverage knowledge and expertise” from the BIS’s Project Aurum.
GEORGIA #CBDC ➡️ DIGITAL LARI PROJECT @Ripple
NBG (NATIONAL BANK OF GEORGIA) has shortlisted 9 companies that have demonstrated sufficient technology potential, maturity, capacity, relevant experience, and desire to join our on-field exploration:
Ripple Labs, Inc.
… https://t.co/ewdXQuFssB pic.twitter.com/JGs6GwOJhe— XRP DROPZ (@DROPZXRP) September 29, 2023
In addition to Ripple, participants in the pilot are Augentic, Bitt, Broxus Holdings, Currency Network, DCM, eCurrency Mint, FARI Solutions and Sovereign Wallet. Ripple is known to be involved in CBDC projects around the world. Countries where it is active include Colombia, Montenegro, Hong Kong, Bhutan and Palau.
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