Ukraine Commercial Bank to Test Digital Currency Built on Stellar

The pilot will test an electronic hryvnia in handling payroll for public employees along with peer-to-peer and merchant payments

AccessTimeIconDec 14, 2021 at 1:00 p.m. UTC
Updated May 11, 2023 at 6:31 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

One of Ukraine’s oldest commercial banks, Tascombank, is planning to test an electronic hryvnia, a digital version of its sovereign currency.

The electronic hryvnia will be built and tested on the Stellar network and be deployed via global fintech platform Bitt’s digital currency management system (DCMS), the bank said in a statement published Tuesday. The pilot will test the digital currency’s effectiveness in public employee payroll, peer-to-peer payments and merchant payments.

Valeriy Danilenko, Tascombank’s deputy chairman who is responsible for e-commerce, said the pilot is supported by Ukraine’s Ministry of Digital Transformation and all “e-money activities” by the commercial bank are under the regulatory supervision of the central bank, NBU. According to the statement, the electronic hryvnia will be built under Ukraine’s existing e-money legislationhttps://old.bank.gov.ua/control/en/publish/article?art_id=40002060&cat_id=40002056, and the pilot is anticipated to kick off in 2022.

“We aim to conduct a pilot in the shortest reasonable time, and we are working on this together with partners and stakeholders in Ukraine,” Danilenko said in an email to CoinDesk. He did not specify the duration of the test.

Monetary authorities the world over are amping up research and trials of central bank digital currencies (CBDC). According to the Atlantic Council’s CBDC tracker, around 80 countries are actively exploring digital currencies backed by central banks. Most recently, in November, Nigeria launched the eNaira, reportedly recording nearly 500,000 wallet downloads in the first three weeks. In October, the European Central Bank kicked off a two-year experiment into a retail CBDC, one that can be used by consumers for making or receiving payments.

Ukraine, too, has been laying the groundwork for the potential launch of an electronic hryvnia. In early July, the nation’s parliament passed a law regulating payment methods that listed a future CBDC in the same category as cash or electronic money. In late July, President Volodymyr Zelensky signed into law a bill that would allow the NBU to issue a CBDC.

The upcoming pilot “will serve as a technological basis for the issuance of electronic money, and is the next key step to advance innovation of payment and financial infrastructure in Ukraine,” said Oleksandr Bornyakov, Ukraine’s deputy minister of digital transformation in the statement.

The statement also said that the pilot will test the use case for programmable payroll with employees at Diia, a public IT solutions enterprise in Ukraine. Danilenko said Tascombank is still considering the number of users that will be taking part in the pilot project as privаte citizens, merchants and institutions are involved.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.



Read more about