Ukraine’s central bank has presented to interested parties an inaugural concept of the nation’s digital currency, the E-hryvnia. The regulator is now exploring potential applications for its digital currency, including cross-border settlements and retail payments.
The National Bank Of Ukraine Presents banks and businesses associated with the E-hryvnia Project
The National Bank Of Ukraine (NBU) presented to banks, financial institutions and participants in the crypto market an early concept of its future central bank digital currency (CBDC). The regulator is requesting feedback regarding the potential issuance of this national fiat currency, the hryvnia.
The primary goal of the e-hryvnia is to supplement cash and other non-cash forms of Ukrainian money, as mentioned in an announcement by the bank. It is expected to be accessible to all sectors, legal entities, government agencies, and the banking and financial sector.
The project was launched in September of last year. Since then, the NBU has been exploring the possibility of large-scale digital currency issuance. In a quoted statement from the bank’s Vice President Oleksiy Shaban, it was emphasized that the next step in the evolution of the e-hryvnia could be the development and implementation of Ukraine’s payment infrastructure – explaining:
[The e-hryvnia] This will help to digitize the economy and increase the availability of cashless payments. It will also reduce their cost. It will also increase transparency and increase confidence in the national currency.
The NBU presented the initial design of the e-hryvnia to interested parties. It also highlighted its architecture, features, and benefits for payment service providers. The Bank took into account the results of a survey by financial market experts about the demand for digital hryvnia, which was conducted earlier this year.
The e-hryvnia is currently being considered for several uses. These These include the use of CBDCs for targeted social and government payments, smart contracts, and non-cash retail payments.
To facilitate the circulation of digital assets, the currency can be used to issue, exchange, and perform other related operations. “The e-hryvnia can become one of the key elements in the development of a quality infrastructure for the virtual asset market in Ukraine,” the central bank believes. It can also facilitate cross-border payments, making them more efficient, faster, and less expensive.
Ukraine has yet to fully regulate its digital currency space. Last fall, Ukraine’s Parliament, the Verkhovna Rada, adopted the “On Virtual Assets” bill. President Volodymyr Zelenskyy made the law official in March of this year after certain revisions he requested.
The recent task of the country’s securities watchdog was to prepare the necessary tax law amendments in order to enforce the law. In the meantime, work is underway to update the document in accordance with EU standards. Ukraine relies on crypto donations to fund its defense and humanitarian efforts in the ongoing war with Russia.
Do you think Ukraine will be able to issue its e-hryvnia in the near future? Please share your thoughts in the comments section below.
