Georgia’s Central Bank Is Creating A Framework To Legalize Bitcoin And Crypto

The National Bank of Georgia is looking to partner with private sector firms on its new central bank digital currency project – the digital gel.

In a statement published in April, the central bank announced CBDCs had the potential to enhance Georgia’s payment system and improve financial inclusion.

The project is named after the currency code for the Georgian lari, GEL.

CBDCs may become essential for the financial ecosystem and spur private innovation and develop.

A small country in the Caucasian region with a population of 3.7 million, Georgia used to be ranked as one of the world leaders in bitcoin (BTC, +1.10%) mining. Now it’s planning to join the growing number of the nations exploring potential sovereign digital currencies.

The project is expected “to enhance efficiencies of the domestic payment system and financial inclusion,” the statement read. The regulator called for technology firms, fintech companies and interested financial institutions to partner with it to develop the digital Georgian lari. The regulator might create a regulatory sandbox, or testing environment, for the companies working on the CBDC project.

No specific details were mentioned in the announcement. The goals of the digital lari pretty much repeat those of other CBDC projects, including the digital dollar: incentivizing innovation, enhancing the efficiency of financial services, facilitating financial inclusion and reaching the unbanked population.

The National Bank is expecting the prospective partners from the private sector to make suggestions on keeping costs low, ease of use and near-instant settlement, the announcement said. The future solution should also allow for smart contracts and automatic payments, “for example automatic tax accounting and tax collection for simple transactions.”

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