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Ukrainian National Bank Considers Issuing State-Digital Currency

Redwan Eid | Sep. 27, 2018
Ukrainian National Bank Considers Issuing State-Digital Currency

The National Bank of Ukraine (NBU) is studying issuing its own blockchain-based digital currency- local news outlet Vesti Ukraine reported Tuesday, September 25.

E-hryvnia- as NBU named it, should be centralized and remain under governmental control, as per the statement the bank published, expecting the the blockchain-based coin to increase the rate of digital payments, and decrease their cost at the same time.

NBU officials consider tying the state-backed digital currency to the national fiat currency, at a rate of 1:1, explaining that this would prevent the inflation rate form growing.

“The decision on the appropriateness of the introduction of electronic hryvnia in full will be taken only after a detailed analysis.”- bank officials reported.

It is mentioned that Ukraine has been endeavouring issuing its national crypto coin since the start of the framework known as “Cashless Economy” in January 2018.

The project unveiled plans to issue an e-hryvnia, based on blockchain technology.

The "Promising" e-hryvnia Reduces Cost of Transactions

In his turn, Alexey Kustch- advisor to the head of Ukrainian Bank Association, described the step as a “promising direction”, noting that e-hryvnia cannot be compared to cryptocurrencies, pointing to that crypto is anonymous and decentralized by definition, unlike a state-backed coin.

“On the one hand, it will protect human rights in terms of property, and on the other — significantly reduce the costs and time of transactions, as well as accelerate the turnover of money in the country.”, added Kustch.

Media outlets reported earlier this year that Ukraine’s parliament had proposed a tax bill for crypto assets, suggesting a five percent tax on individuals and legal entities operating with crypto, and eighteen percent tax for crypto-related profits.

In a similar context, Estonia had attempted before to issue its state-backed crypto coin the last year, however its suggestion was met with rejection at the European level.

Resources reported earlier that the Ukrainian Cabinet of Ministers previously held a meeting at the Financial Stability Board to determine the legal status of cryptocurrencies, supporting the concept of crypto regulation.

The step that financial observers attribute to the incident of running fake crypto exchanges last June by four people in the country.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.