National Bank of Ukraine unveiled concept of CBDC
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The National Bank of Ukraine (NBU) has unveiled a concept of the nation’s central bank digital currency (CBDC), digital hryvnia (e-hryvnia).
The e-hryvnia is designed to supplement cash and non-cash forms of currency which is intended to be accessible to legal entities, state agencies, and financial institutions segments of society. NBU presented the draft e-hryvnia design, architecture, features, and benefits for payment service providers, and the possibility for rapid payments, at the meeting with the interested parties.
The currency may also be used to facilitate the issue, exchange, and other associated activities that support the circulation of digital assets. The trademark "e-hryvnia" for the NBU was registered by the Ukrainian Intellectual Property Institute in October 2022, according to the release.
The central bank is analyzing and developing three potential CBDC options based on design and key features.
The e-hryvnia for retail non-cash payments is the first option, along with the potential for "programmed" money through smart contracts. Using the second CBDC option, e-hryvnia would be used for cryptocurrency exchange, issuance, virtual asset issuance, and other operations. The third alternative which enables cross-border payments for quicker, less expensive, and more transparent international transactions.
The release states that e-hryvnia can be a key component of Ukraine's virtual asset infrastructure development.
The NBU has been examining the feasibility of a large-scale issue of the digital currency since September of last year from when the initiative began. In 2021, the bank surveyed financial market experts on the demand for a digital hryvnia. The bank considered the findings of the survey. A Ukrainian CBDC, according to Oleksii Shaban, director of NBU's department of payment systems and innovative development, may help guarantee economic stability, supports the nation's monetary sovereignty, and promote sustainable economic growth.
In recent years, the NBU has actively investigated the prospect of releasing a CBDC, hiring blockchain experts, and collaborating with significant industry initiatives like the Stellar Development Foundation. The regulator claims that a blockchain-based retail payment pilot program was launched by the NBU in 2018 for e-hryvnias.
CBW - External Analyst