Ukraine introduces its own draft digital currency in the midst of war with Russia


Key facts:
  • The electronic hryvnia will be “the next step in the development of the payment infrastructure in Ukraine.”

  • The Ukrainian CBDC will have different use cases such as international payments.

The National Bank of Ukraine (the equivalent of a central bank) has taken another step on the path to creating its own digital currency (CBDC), e-grivna. In the context of war and crisis, the European country refers to the monetary instrument through which they seek to digitize their economy.

The Foundation indicated in a press release that the project is a concept e-grivna is provided with the aim of receiving “feedback” For the sector of banking, financial and virtual assets on Ukrainian territory.

“The electronic hryvnia is an electronic form of the monetary unit of Ukraine, which will be a direct obligation of the Central Bank. Its main purpose is to effectively perform all monetary functions, complementing the monetary and non-monetary forms of the hryvnia,” the Central Bank stated in its press release.

The e-grivna project has an ancient history. Since 2018, there has been talk of a crypto asset based on Ukraine’s national currency, and the Central Bank started studies last year. To determine the feasibility of issuing e-grivna on a large scale.

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The National Bank of Ukraine was entrusted with providing A Possible design of e-grivna, as well as its architecture and other featuresfor payment service providers living in the country, is currently at war.

According to the highest monetary entity of Ukraine, in order to present the draft concept of its central bank digital currency, they took into account the results of the survey of “financial market experts” conducted in 2021, as well as the experience and research of digital currencies of central banks around the world. own.

According to Oleksiy Shaban, Deputy Governor of the National Bank of Ukraine, the development and implementation of e-hryvna could be “the next step in the development of payment infrastructure in Ukraine.”

They can also “contribute to the digitization of the economy, increase the spread of cashless payments, reduce their value, increase their transparency and increase confidence in the national currency as a whole.”

“This can have a positive impact on ensuring economic security and strengthening the monetary sovereignty of the state, and strengthening the ability of the National Bank to maintain financial and price stability as a guarantee of sustainable economic growth,” the Ukrainian banker said.

Different use cases

According to the Central Bank of Ukraine, the digital currency they are aiming for could have an appropriate use in retail payments, due to its potential “programmable” monetary functions. just like fiat, This money generates inflation when it is issued without supporting economic growth.

In the opinion of the banking institution, e-grivna will be useful for “specific social payments, reducing public spending on management and control over a specific use of funds.”

The bank also notes that, together with e-grivna, the market for virtual assets (such as bitcoin and cryptocurrencies) can develop its infrastructure “in high quality” on Ukrainian territory, since they intend to Have a circulation greater than issuance of a central bank digital currency.

The National Bank of Ukraine further noted that the electronic hryvnia can “ensure the possibility of cross-border payments.” In his view, this technology will allow international payments to be “faster, cheaper and more transparent”.

The monetary institution explained that what was presented this week was a draft of the concept of e-grivna. Therefore, they appreciate creating a file Concept with “comprehensive considerations” of interests and needs later market participants.

“The National Bank of Ukraine, like most central banks in the world, will approach the issue of issuing its digital currency in a balanced manner taking into account, in particular, the possible impact of its introduction on the country’s financial system,” the governing body said.

War and support Ukraine with Bitcoin

A draft concept of a Ukrainian e-hryvnia comes as many countries advance to create their own primary digital currencies. As reported by CryptoNoticias this year More central banks are joining in the digitization of their currency.

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Binance referral countries

The Bank of Ukraine’s move is also known at a time when the war against Russia is intensifying and approaching the year it began. Because of this war situation, Ukraine has been known to start accepting bitcoins and cryptocurrencies as donations.

This practice is being maintained, and everything indicates that it will continue for the duration of the war, given that the central bank is in the first steps of creating its own central bank digital currencies and Its design may take a few years to completeas is currently the case with the digital euro, from the European Central Bank.

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