Cryptocurrency friendly Ukraine completes pilot test for state backed crypto, e-hryvnia

The attempt to push cryptocurrencies into the mainstream realm has been an ongoing process with several institutions jumping onboard the concept of digital assets. Ukraine has been actively trying to include cryptocurrencies into the country’s grand scheme, with the main proponent being the National Bank of Ukraine [NBU].

Latest reports from the Bank state that the NBU completed an expanded pilot project for the launch of e-hryvnia, Ukraine’s native cryptocurrency. Officials close to the bank pointed to different avenues where the digital asset can come to play with the main focus being an increase in use cases. Alexander Yablunivsky, the Director of the Payment Systems and Innovative Development department at NBU said,

“At the end of last year, we launched a practical pilot, when this tool was issued for NBU employees using the existing methodology, in order to evaluate the practical aspect of its use, the strength of the central bank in implementing such tools, and get some feedback from users. The pilot is now complete. We prepared an analytical note and we will consider it on the board of the National Bank.”

The NBU official has also made it clear that at the moment, there was no underlying strategy to develop cryptocurrencies around the world. Yablunisky further claimed that the main use of digital currencies is to make sure the transactions occur quickly and safely. In his words,

“We are not talking about cryptocurrency, we are talking about digital currency of the central bank. It can be implemented on both the centralized registry technology and the decentralized one. This is a completely separate issue, which follows from the target model (for e-hryvnia – IF ) chosen.”

In September 2018, NBU first talked about introducing a native cryptocurrency. The decision was taken to ensure that corruption is reduced and the financial framework reached a high point of stability. Alexei Kushch, the adviser to the Head of the Association of Ukrainian Banks said,

“Many central banks are developing similar national currencies. Now the currency circulation in Ukraine functions in two spheres: it is cash and non-cash, that is accounts in banks. And with the help of Blockchain technology you can start the third form – digital. Digital money will also be on bank accounts, but will be recorded on an electronic wallet. At the same time, due to the Blockchain technology, money will be protected from fraud, hacker attacks and illegal withdrawal.”

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