[ad_1]
National Bank of Georgia (NBG) has issued a call for companies in the fintech sector, financial institutions and technology firms to support its efforts to create a digital currency. Georgia’s central bank wants to employ new technologies to raise the efficiency of the country’s payment system and promote financial inclusion.
Georgia’s Central Bank Mulling Digital GEL
NBG is now inviting companies from innovative industries as well as interested financial institutions to join a public-private partnership tasked to facilitate the adoption of a central bank digital currency (CBDC). The bank is considering launching the digital version of the national fiat, Georgian lari (GEL), as a publicly available coin that will have legal tender status.
The digital GEL can be used to settle payments or as a store of value, the National Bank of Georgia explained in an announcement published on its website. But what its management really hopes to achieve with the currency is to “unlock the tremendous value of innovative business models for the benefit of society” and “reach previously unbanked populations.” The bank further elaborates:
The rise of digital technologies underscores the necessity to update central bank money… to better serve the digital economy and increase public policy efficiency.
NBG also notes that it supports a regulatory sandbox approach to the development of the digital GEL. The bank plans to use its Regulatory Laboratory, a framework allowing financial sector entities under its supervision to test innovative services and products in real-time and controlled environments. The financial authority believes this will help it to develop its new regulations and update the legal framework to govern the CBDC.
In its project announcement, the National Bank of Georgia recognizes the potentially disruptive nature of the technology involved in CBDCs and the need for “sound risk management during the development process.” The bank also says that it shares the principles regarding the development of such currencies outlined in a report on the matter published by the Bank for International Settlements and prepared by a group of major central banks.
Key Features to Include Offline P2P Transactions
NBG will aim to develop the digital GEL with several important features. The project must be a low-cost endeavor, given the small size of Georgia’s financial market. The technology behind it has to be easy to use and offer convenience for retail consumers, small and medium enterprises.
Settlements should be near-instant and the system will be required to support “limited P2P offline transactions.” The platform must be easy to integrate by commercial financial institutions and fintech companies and should support the implementation of smart contracts and automatic payments.
The bank also insists that the technology must ensure personal data integrity and compliance with GDPR standards. At the same time it has to enable the collection of statistical information without de-anonymizing personal information.
“The solution should seek an optimal balance between ensuring privacy and AML/CFT risks,” NBG notes, emphasizing that it should also ensure transaction traceability in compliance with the FATF standards. The supervisory authority wants the system to be resistant to cyberattacks, allow to impose limits on transactions and provide the option for multi-signature approvals for certain operations. Another requirement for the Georgian CBDC is to support interest payments.
What do you think about Georgia’s plan to develop a CBDC allowing offline P2P transactions? Share your thoughts in the comments section below.
Tags in this story
BIS, CBDC, Central Bank, COIN, Digital Currency, fatf standards, financial inclusion, Financial Institutions, Fintech, fintech companies, Georgia, NBG, p2p, Payments, project, transactions
Image Credits: Shutterstock, Pixabay, Wiki Commons
(function(d, s, id)
var js, fjs = d.getElementsByTagName(s)[0];
if (d.getElementById(id)) return;
js = d.createElement(s); js.id = id;
js.src = ‘https://connect.facebook.net/en_US/sdk.js#xfbml=1&version=v3.2’;
fjs.parentNode.insertBefore(js, fjs);
(document, ‘script’, ‘facebook-jssdk’));
[ad_2]
Source link
