For several years, the National Bank of Ukraine (NBU) has been working on the creation of its digital currency (CBDC) or e-hryvnia. Government authorities have already hired blockchain developers to make this happen. They have also partnered with major industrial projects such as the Stellar Development Foundation. In 2018, they launched a pilot project for issuing e-hryvnia for blockchain-based retail payments. The authorities have just marked a new step in the implementation of this project.
The next step in the evolution of payment infrastructure in Ukraine?
On November 28, the National Bank of Ukraine (NBU) announcement a concept project for its CBDC, the e-hryvnia. The goal is to perform all the functions of money by supplementing monetary and non-monetary forms of the hryvnia. For information, the hryvnia is the monetary currency of the country.
“The development and implementation of e-hryvnia can be the next step in the evolution of Ukraine’s payment infrastructure. A Ukrainian CBDC could have a positive impact on economic security and strengthening the monetary sovereignty of the state, as well as sustainable economic growth”, said Oleksii Shaban. He is the director of the payment systems and innovative development department of the NBU.
To carry out the CBDC project, the authorities are reaching out to the various stakeholders likely to contribute. These include virtual asset market participants, payment companies and government agencies, among others.
Three options under consideration for the CBDC
The NBU is studying and developing three options in the implementation of this crypto project. This, depending on their design and their main characteristics.
The first targets the CBDC for retail payments with the possible functionality of programmable currency, via smart contracts. A retail e-hryvnia would allow the implementation of targeted social payments and the reduction of government expenditure on administration, the NBU explains. The second CBDC option provides for a use of e-hryvnia to be used in crypto exchange operations, issuance and other virtual asset operations. The third option foresees a Central Bank crypto that will allow cross-border payments. This, in order to offer faster, cheaper and more transparent global transactions.
Last year, Tascombank initiated a private e-hryvnia currency pilot project. The project is still under development under the supervision of the Central Bank.
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