Ukraine to test digital currency, National Bank governor reveals e-hryvnia plans
Photo: Governor of the National Bank of Ukraine Andriy Pyshnyy (Vitalii Nosach, RBC-Ukraine)
The National Bank of Ukraine has an understanding of the potential architecture model for the e-hryvnia. Preparations are underway for a pilot project of a digital form of the non-cash hryvnia, and the search for a technology partner is nearing completion, Andriy Pyshnyy, Governor of the National Bank of Ukraine, said in an interview with RBC-Ukraine.
"We want this pilot to give us as much information as possible to decide on a large-scale issue. At the same time, we are looking very closely at how the CBDC process is developing in other central banks," Pyshny said.
According to him, special attention is paid to the development of the Digital Euro project, given Ukraine's EU integration course. The NBU team interacts with the European Central Bank, the Bundesbank, the Bank of Belgium, the Bank of France, and the Bank of Singapore.
"But it's too early to say that the decision to issue the e-hryvnia is about to take place. First, there will be a pilot, and we are currently preparing for this pilot," the NBU governor warned.
What is a digital currency and how does it differ from cryptocurrency?
CBDC (Central Bank Digital Currency) is issued by a state central bank (e.g., NBU, ECB, Fed). It is an official means of payment, like cash, but in digital form. It has the legal status of money and is obligatory for acceptance as payment.
Cryptocurrency is issued by individuals or communities (e.g., Bitcoin). It is not controlled by any state or bank. It is not an official currency in most countries, and its status varies. It can be banned, restricted, or freely circulated.
The National Bank of Ukraine is studying the feasibility of introducing its own retail digital currency (CBDC), the e-hryvnia. The e-hryvnia is intended to be a complement to cash and funds held on accounts. It will not be a substitute for them, but only an additional option that can be used at will.
According to Oleksii Shaban, deputy governor of the NBU, cash will not disappear if electronic money is introduced. The NBU is not even considering abandoning cash.
