In a recent announcement, the National Bank of Georgia said that it would carry a pilot testing of its CBDC – Central Bank Digital Currency – in 2022. The Bank’s pilot test would first be conducted on retail users.
The Bank had, in its official press release in April 2021, revealed its idea to launch a CBDC that is publicly accessible. The Bank had explained that such a move would be essential to keep up with fast-emerging digital technologies. The launch of CBDC would help the Bank contribute to the digital economy better and help improve the efficiency of payment systems, the statement had read.
The Bank seems to be on track with its previous announcement, all set to test the digital Georgian Lari or GEL, next year.
A New Form of Cash – The Digital Lari
Papuna Lezhava, a vice governor at the National Bank of Georgia, equated the digital Lari to more of a cash evolution than a cryptocurrency. He opined that the digital Lari would make financial inclusion more comprehensive and payment systems more efficient.
Lezhava also said that the digital Lari would be a competition for cryptocurrencies in some financial services. But the relative stability of the Lari would not make it vulnerable to “speculative accumulation” as can be the case with coins that suffer from volatility, the vice governor added.
Explaining further about the digital Lari, Lezhava said that the Lari would be available all through the day to use. Using Lari will not need an Internet connection, he added.
Lezhava believes that people will find the Lari a faster and more affordable means of payment than the conventional systems.
Digital Lari Could be a Key Driver of Financial Progress
As a CBDC, the digital Lari has the potential to deliver several financial benefits to society, the Bank had said in its earlier official statement. The Bank had also expressed the belief that the digital Lari could support the launch of new financial technologies and facilitate reach to the unbanked demography.
The vision of the GEL project is similar to that of other CBDC projects launched globally. This development could position Georgia among the league of global financial institutions pioneering digital currencies.