Georgian central bank plans to roll out pilot scheme for digital currency

The Georgian central bank plans to roll out a pilot scheme for a digital version of the national currency lari, governor Koba Gvenetadze said on Wednesday.

Gvenetadze said the digital currency would have the same value and legitimacy as banknotes and coins, and added the main idea behind testing the innovation was to find out how it would serve "respective purposes".

Implementation of such a project is impossible without research [...] It's also interesting for us to see what the relatively larger banks are doing in this direction”, he said.

The national bank first announced the digital lari project in 2021 and invited innovators for a public-private partnership for the purpose. The bank explained the rise of digital technologies underscored the necessity to update central bank money “by creating a digital version of the [currency] to better serve the digital economy and increase public policy efficiency”. 

The NBG is considering launching a publicly available Central Bank Digital Currency to leverage new technologies to enhance efficiencies of the payment system and financial inclusion”, its announcement said. 

The CBDC is a direct liability of the central bank that can be used to settle payments, or as a store of value and will have legal tender status. 

The NBG said the Bank for International Settlements, the largest association of the central banks, regularly monitored progress towards the CBDC, which leading central banks have been actively working on introducing over the recent years. China and the United States are either testing their own version of digital currency or preparing to roll it out.