The National Bank of Ukraine presented to representatives of banks, non-banking financial institutions, and the virtual assets market for discussion of the project of the concept of e-hryvnia.
The National Bank of Ukraine (NBU) has unveiled a concept for its prospective digital hryvnia (e-hryvnia) central bank digital currency (CBDC). On November 28, the central bank of Ukraine issued a statement on the idea of the electronic hryvnia, which as its main function seeks to replace both the cash and non-cash forms of the hryvnia.
The NBU claimed that it has discussed the e-hryvnia idea and is working on the CBDC project with participants in the virtual asset market, payment companies, and government agencies.
The announcement states that the central bank is currently analyzing and developing three potential CBDC options based on design and key features. The e-hryvnia for retail non-cash payments is described in the first option, along with the potential for “programmed” money through smart contracts.
According to the NBU, a retail e-hryvnia would make it possible to implement targeted social payments and cut back on administrative costs for the government.
The second CBDC option envisions the e-hryvnia available for usage in operations related to cryptocurrency exchange, issuance and other virtual asset operations. “The e-hryvnia can become one of the key elements of quality infrastructure development for the virtual assets market in Ukraine,” the announcement notes.
The third option includes the e-hryvnia to enable 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 the payment infrastructure of Ukraine,”Oleksii Shaban, director of NBU payment systems and innovative development department, said in the statement.
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 e sustainable economic growth. The trademark “e-hryvnia” for the NBU was registered by the Ukrainian Intellectual Property Institute in October 2022, according to the announcement.
In recent years, the NBU has actively investigated the prospect of releasing a CBDC, hiring blockchain developers and collaborating with significant industry initiatives like the Stellar Development Foundation. The regulator claims that in 2018, the NBU began a pilot project to issue the e-hryvnia for blockchain-based retail payments.
