Ukraine comes up with concept for digital national currency

The National Bank of Ukraine (NBU) announced yesterday that it has proposed the issuance of a central bank digital currency (CBDC), the e-hryvnia. This digital currency would have all the functions of the normal hryvnia, but fully digitized.

E-hrvynia

The Ukrainian central bank announced that they currently have three candidates as possible final digital currencies. First, these three concepts will be extensively tested, and eventually the concept that best comes out of the test will be chosen as e-hryvnia.

The first option describes an e-hryvnia mainly intended for retail payments via smart contracts. A retail e-hryvnia would also enable the reduction of government spending on administration, the NBU said.

The second CBDC option envisages that the e-hryvnia will be available for use in exchanging crypto and other digital assets on exchanges.

“The e-hryvnia can become one of the most important elements of the development of quality infrastructure for the virtual asset market in Ukraine,” the announcement said.

The third option mainly focuses on providing international payments with the e-hryvnia. In this way, payments to and from abroad should become a lot faster, cheaper and more transparent.

The Central Bank of Ukraine

The Director of the Central Bank of Ukraine, Oleksii Shaban, believes that the digital hryvnia has the potential to revolutionize payments across the country and bring major positive change:

“The development and implementation of the e-hryvnia could be the next step in the evolution of Ukraine’s payment infrastructure,”

Ukraine has been investigating the issuance of a CBDC for some time. In 2018 launched the NBU already one pilot to investigate the feasibility of digital currencies. In October of this year, this process gained momentum. Then the trademark “e-hryvnia” was also registered. It is not yet known when the next step will be ready.