On Wednesday, the National Bank of Georgia announced that it was considering issuing a central bank digital currency, or CBDC.
In its announcement, Georgia’s central bank noted that in digitizing the Lari (GEL), it was looking for many of the same advantages that the myriad other nations launching CBDCs have pointed to: financial inclusion, streamlined settlement and government sovereignty over a developing monetary system.
The plan for the project, dubbed “Digital GEL,” entails complying with the standards for a CBDC that the Bank for International Settlements set out last year.
Today’s announcement also serves as an invitation for innovators looking to contribute to Georgia’s efforts via public-private partnerships. Notably, the bank does not explicitly mention blockchain technology.
CBDCs have shown up on the agendas of all of the largest central banks in the world, perhaps most notably China via its DC/EP or eCNY initiative. Georgia’s larger neighbors Russia and Turkey are working on similar projects. A relatively small country whose economy heavily depends on Black Sea tourism, Georgia’s central bank wields less power.
However, some of the countries that have led the way in CBDC development have been smaller tourist economies, possibly because there is less concern over mass abuse of the local monetary and financial system.