Ukraine May Issue CBDC to Facilitate Crypto Trading by DailyCoin
Ukraine Could Issue a CBDC to Facilitate Crypto Trading
- The National Bank of Ukraine explores options for its CBDC
- “E-hryvnia” could help facilitate crypto transactions
- Crypto has been essential to Ukraine’s war effort, officials say
Ukraine is exploring potential use cases for its CBDC, including retail payments, cross-border transactions, and facilitating crypto transactions.
On November 28, the National Bank of Ukraine (NBU) released a statement exploring the idea of issuing its own central bank digital currency (CBDC). The Ukrainian CBDC would be called e-hryvnia, after its national currency.
Central bank officials say e-hryvnia could be “the next step in the evolution” of Ukraine’s payments infrastructure. The CBDC could help increase transparency and build trust in the national currency, NBU Deputy Governor Oleksii Shaban said.
The bank is exploring several use cases for the CBDC, which will be reflected in its final design and functionality. On the one hand, e-hryvnia could play a role in retail payments for social benefits. For example, the government could issue e-hryvnia benefits that could only be spent on certain categories of items. These “programmable money” features help the government save on administration costs.
Moreover, e-hryvnia could also support crypto asset trading. CBDC could potentially serve as an insured asset allowing users to move the value of crypto assets and vice versa. Finally, e-hryvnia could also facilitate cross-border payments.
Using e-hryvnia should be convenient and accessible to all segments of the population, authorities say. This includes legal persons, government agencies, banks and non-banking financial institutions.
Ukraine is a leader in digital innovation
The NBU’s announcement is part of the country’s broader digital innovation strategy, in which cryptocurrencies play an important role. In recent years, Ukraine has long been at the forefront of crypto adoption.
Officials have even said that crypto donations have been crucial to the country’s war effort against Russia. Ukraine’s Deputy Minister of Digital Transformation, Alex Bornyakov, called cryptography “an essential tool of Ukraine’s defense” that literally saved the lives of their soldiers.
Ukraine is just one of the countries interested in issuing its own central bank digital currency (CBDC). Most industrialized countries are currently at least in the research phase of introducing a CBDC. Countries like China, France, Saudi Arabia and Canada have already launched pilot projects. However, no country has yet attempted a large-scale launch.
on the reverse
- CBDCs have come under fire due to concerns about privacy and civil liberties. CBDCs give too much power to the state, say critics.
Why You Should Care
CBDCs could potentially compete with more decentralized digital currencies, especially stablecoins and .
Learn more about what CBDCs are and how they might work:
CBDC Explained: Everything You Need to Know About Central Bank Digital Currency
Check out some of the common criticisms of CBDCs:
CBDCs just don’t work – for anything
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