All You Need to Know: National Bank of Georgia Starts Working on Issuing Digital GEL

All You Need to Know: National Bank of Georgia Starts Working on Issuing Digital GEL

The National Bank of Georgia (NBG) is working on issuing digital GEL. What is the current stage of this process and what should be expected from the digital currency? NBG Vice President Papuna Lezhava spoke in detail on this particular matter with Forbes Talks. According to him, the national digital currency will be a fast, simple and modern form of payment that will be a way to keep up with the technological developments in the world.

As per his statements, 85% of the world’s central banks are already working on digital currency – some  are in the research phase, while others are testing, or even implementing it, including China and the Bahamas. “We would like to be among the frontrunners of this trend,” stated the NBG VP.

Digital GEL will be issued solely by the National Bank. According to Papuna Lezhava, the electronic money will most likely be based on blockchain technology, used by many cryptocurrencies today. There will be both similarities and differences between digital GEL and cryptocurrency.

“There are many similarities, especially in terms of technology. This too will most likely be blockchain-based, fast and cheap payment method. However, unlike cryptocurrencies, the so-called mining will not take place. Digital lari may compete with cryptocurrencies in some services, but it will not have the character of speculative accumulation, as is the case with cryptocurrencies,” – stated Mr. Lezhava.

It should be noted that unlike the latter, digital lari can not be used for financial speculation, since it will not be dependent on mining. According to the reports, it will be possible to use electronic money continuously throughout the day. The fact that it can be managed offline should also be emphasized.

The Vice President of the National Bank of Georgia weighed on the risks that may result from the release of digital lari in circulation. For example, in order for the new form of payment not to cause the outflow of standard money from banks, it will be possible to store only a certain amount of digital currency in e-wallets. When touching upon cybersecurity issues, the National Bank spokesman does not rule out the possibility that digital GEL could become a new tool in the fight against cybercrime, much a risky form of payment.

It should be noted that the data of digital GEL owners will be collected only in the electronic wallet where the user will store digital currency. As stated, the National Bank of Georgia will not have direct contact with its owner and, consequently, will not have access to such information.

According to Papuna Lezhava, the pilot version of the electronic currency will be put into use in the upcoming year. Per his statements, the use of digital GEL at the initial stage will be available only across Georgia, in the retail market. In order for digital GEL to become a legal means of payment, the Vice President of the National Bank of Georgia deems the legislative changes necessary.

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