Ukraine Completes Pilot Project for a National Digital Currency ‘E-Hryvnia’

Progressive countries all over the globe are rushing to launch their own versions of cryptocurrencies to take advantage of the relatively young market. Cryptocurrencies we’ve seen so far have been from private companies, disconnected from any regional or national currencies. However, a new wave of cryptocurrencies is starting.

These are the cryptocurrencies that are backed by government bodies and thus considered legitimate in their relative regions. Just this week Ukraine’s central bank has successfully completed a pilot project for E-Hrynvia, a national digital currency. Although it’s technically not a cryptocurrency, it still falls under the class of digital currencies.

According to Interfax Ukraine, a local press agency which initially reported on the project, the National Bank of Ukraine (NBU) has been considering this project for close to a year. The pilot project was finally launched in December 2018. Aleksandr Yablunivskiy, the head of Ukraine’s payment networks and innovative growth department said:

“At the end of last year we began a practical pilot, when the instrument was released for NBU employees under current methodology, in order to assess its practical use aspects and the ability of the central bank to realize future projects, as well as getting feedback from users.”

NBU also commented that there are a lot of regulations currently blocking the path to progress in the crypto space and urged Ukraine’s lawmakers to create adequate legislation in order to help cryptocurrencies grow under the supervision of regulative authorities. Yablunivskiy further commented, “We can even say we’ve gotten ahead of global leaders [in national digital currency], given we’ve taken a step in conducting practical research, albeit a small step.” He further stated that the bank will now carefully analyze the results of the pilot and consider their next move.

“We are not talking about cryptocurrency; we are talking about a central bank digital currency. It can be implemented with both the technology of a centralized registry and a decentralized one.” He further commented, talking about the NBU’s announcement last month that it was considering a digital version of its currency not based on blockchain technology.

Alexei Kushch, the adviser to the Head of the Association of Ukrainian Banks stated:

“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.”

The plans for the digital currency were put in place in hopes of curbing corruption and build a stable financial framework.