A report released by The National Bank of Ukraine (NBU) reveals that it is running a pilot project to develop a central bank digital currency (CBDC). This digital currency has been dubbed as E- hryvnia and it will be deploying the Stellar Lumens blockchain protocol in this pilot project. The application software for E- hryvnia currency is based on Stellar SDK with the Stellar core Horizen API.

The report further discloses that the pilot project to develop the E- hryvnia will be using the Stellar Protocol to observe and analyze the advantages of developing the digital currency and the execution of the pilot program.

Why Stellar blockchain? 

The report mentions the reasons behind the deployment of the stellar protocol in this project. The NBU is convinced that the Stellar network has the capacity to offer capability, speed, simplicity, and finest security as well as seamless operations to run the functions of the newly developing currency efficiently. 

But the report also mentions that the NBU will remove some important features of the stellar blockchain due to some technical challenges in this process. The current version of the Stellar blockchain is a private version that is likely to affect the elimination of the errors and threats of the blockchain as well as it may affect the platform functions when new options are added to the basic protocol. Also, the private version of the blockchain protocol makes the system highly dependable on the parent company which has developed it.

The NBU, therefore, has restricted the launch of the E- hryvnia at the national level temporarily. It will further analyze and eliminate the risks involved in future developments. As per the reports, the bank has issued a limited amount of E- hryvnia and the transactions are going in a live environment to trace the challenges coming across. 

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Jayashree Ingle

CBW - External Analyst

INDIA