National Bank of Ukraine completes e-hryvnia digital currency trial

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The central bank of Ukraine has completed the latest stage of its digital currency pilot, as it continues to investigate the utility and functionality of a so-called “e-hryvnia,” Interfax reported.

The National Bank of Ukraine said it had completed expanded testing of the digital currency program, with the results of the trial now being considered by the board of directors.

Alexander Yablunivsky, director of the department of payment systems and innovative development at the National Bank of Ukraine, was quoted by the news outlet saying the central bank would now reflect on its findings. He explained, “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. We will consider it on the board of the National Bank.”

The trial is the latest example of a national central bank considering the merits of a central bank digital currency, or CBDC, with a number of reserve banks globally already working on their own digital currency proposals.

CBDCs are digital assets representing a fiat currency, offering the benefits of blockchain payment through a state-backed national currency.

This appeals to banks by enabling access to blockchain payments for inter-bank settlement, for example, as well as to merchants and consumers looking to transact in fiat currency without the downsides of cash or mainstream payment infrastructure.

Yablunivsky stressed that the plans under consideration by the NBU were not in fact a cryptocurrency, but a digital currency issued by the central bank directly.

“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,” Yablunivsky said.

The central bank launched a research project into the e-hryvnia back in 2016. With the proposals one step closer to implementation, organizations in the Ukraine could soon benefit from blockchain payments in national currency.