Digital currencies could receive an important boost from Ukraine in the near future. According to some reports, the National Bank of Ukraine is considering creating its own central bank digital currency (CBDC). The virtual asset would be based on the national currency known as Hryvnia. Different central banks are considering launching similar cryptocurrencies.
Ukraine Bank Weighing Own Virtual Currency
Local reports say that the new currency would be known as ‘electronic hryvnia.’ Additionally, it will be part of the Ukrainian national payment system. With this currency, it will be possible for the country to reduce the amount of fiat currency in circulation.
The new digital coin will be tied to the Hryvnia 1:1 in order for citizens to have the same unit of account.
Alexei Kushch, Adviser to the Head of the Association of Ukrainian Banks, said that there are different central banks working on similar digital currencies.
About it, he explained:
“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.”
Blockchain technology would allow for money to be protected from fraud. Additionally, it cannot be copied or hacked, something very positive for users.
Officials of the bank explained that this is also a great opportunity for cryptocurrencies to grow in the country. Nonetheless, there are some experts that advised the National Bank of Ukraine that it is currently not necessary to adopt a CBDC.
Ukraine has suffered in the last years different political and economic crisis. That includes conflicts with Russia over Crimea and the eastern part of the country. Additionally, Ukraine has high rates of corruption and poverty. About it, the financial analyst Igor Lvov, explained that people below the poverty line do not care about how to transact money. He said that they need the entity for expenditure.
The decision about the CBDC has not been taken yet and might not enter into effect. However, authorities are evaluating this possibility.
According to a document released by Norges Bank, the central bank of the country, there is an intention to create a virtual currency to be used as a medium of exchange.
Sweden could also launch a cryptocurrency based on IOTA’s technology.
Countries are going to focus on Know Your Customer and Anti Money Laundering policies.
Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.