The National Bank of Ukraine (NBU) has submitted a draft concept for its central bank digital currency (CBDC), the digital hryvnia, or e-hryvnia.
On November 28, the Ukrainian central bank published a statement on the concept of the e-hryvnia, which is intended to perform all the functions of money. complementing the cash and non-cash forms of the hryvnia as its main purpose.
The NBU said that it has presented the e-hryvnia concept and continues to develop the CBDC project with virtual asset market participants, payment companies and state bodies.
According to the announcement, The central bank is currently considering and developing three potential CBDC options, based on design and key features.
The first option describes the e-hryvnia for non-cash retail payments with the possible functionality of “programmed” money through smart contracts. A retail e-hryvnia would allow the implementation of targeted social payments and the reduction of government spending on administration, the NBU said.
The second option of CBDC provides for the e-hryvnia to be available for use in operations related to the exchange of cryptocurrencies, issuance and other operations of virtual assets. “The e-hryvnia can become one of the key elements of quality infrastructure development for the virtual asset market in Ukraine,” the announcement states.
The third option of the e-hryvnia includes allowing cross-border payments in order to provide faster, cheaper and more transparent global transactions.
“The development and implementation of the e-hryvnia can be the next step in the evolution of Ukraine’s payment infrastructure,” said Oleksii Shaban, in the statement. director of the department of payment systems and innovative development of the NBU. He added that a Ukrainian CBDC could have a positive impact on ensuring economic security and strengthening the monetary sovereignty of the state, as well as on sustainable economic growth.
According to the announcement, the Ukrainian Institute of Intellectual Property registered the trademark “e-hryvnia” for the NBU in October 2022.
As previously reported, the NBU has been actively studying the possibility of issuing a CBDC in recent years; it has hired blockchain developers and cooperated with major industry projects such as the Stellar Development Foundation.
According to the regulator, the NBU launched a pilot project to issue the e-hryvnia for blockchain-based retail payments as early as 2018.
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