Ukraine Central Bank Explores CBDC As A 'Key Element' To Raise Money, Buy Goods

Zinger Key Points
  • E-Hryvnia, which will have a direct responsibility to the National Bank of Ukraine, will be the country's digital form of currency.
  • Financial institutions and cryptocurrency players were given a draft of the digital Hryvnia concept by NBU for debate.

The National Bank of Ukraine (NBU) is in talks with bank representatives, non-banking financial organizations, and the cryptocurrency market about plans for an electronic version of the hryvnia, Ukraine's legal currency.

According to an official statement, the NBU aims to create an electronic hryvnia that could be used for a variety of purposes, including the issuance and exchange of virtual assets.

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A statute allowing the central bank to issue a CBDC that can be classified in the same category as cash or electronic money was signed into law by President Volodymyr Zelensky in July 2021.

Since then, Tascombank disclosed plans to test an electronic hryvnia built on the Stellar network. And after Russia started invading Ukraine in February, cryptocurrency started to play a part in raising money and making it easier to buy essential goods.

Since the war began, Ukraine has received donations in Bitcoin BTC/USD, Ethereum ETH/USDDogecoin DOGE/USDSolana SOL/USD, and Polkadot DOT/USD from investors around the world.

CBDCs, which can be used for cross-border transactions and non-cash payments, are being explored by more than 100 jurisdictions worldwide. Ukraine has been investigating use cases since 2017.

"E-hryvnia can become one of the key elements of qualitative infrastructure development for the virtual-assets market in Ukraine," NBU stated.

NBU, like the majority of central banks worldwide, would approach the decision to issue its own digital currency cautiously and take into consideration the potential effects on the country's financial system.

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Photo by Marek Studzinski on Unsplash

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