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NBU Welcomes Ministry of Digital Transformation’s Pilot Project to Issue Programmable Electronic Money

NBU Welcomes Ministry of Digital Transformation’s Pilot Project to Issue Programmable Electronic Money

The NBU has commended efforts by the Ministry of Digital Transformation of Ukraine, in conjunction with TASCOMBANK, the FinTech company Bitt, and the Stellar Development Foundation, to run a pilot project that will perform a test issue of a blockchain-based electronic currency.

As part of this effort, employees of the state-owned company Diia will have a chance to give the programmable digital money a dry run. The project aims to explore the potential for use of blockchain-based electronic currencies. It will help identify possible applications (programming functionality) of such money.

"This pilot project is not directly concerned with issuing the e-hryvnia, the NBU’s digital currency. Under new legislation, the NBU is the only authority that can issue the e-hryvnia," said NBU Deputy Governor Oleksii Shaban. "This pilot project is intended to test the underlying technology by having one of the Ukrainian banks issue electronic money. The project will be supported by the Ministry of Digital Transformation, and the NBU will be informed of the results. These findings will help the regulator assess and unlock the potential for use of this programmable blockchain technology in designing an e-hryvnia concept."

The NBU, jointly with the Ministry of Digital Transformation and other authorities, is actively working to create the e-hryvnia concept, he said.

The idea behind the concept is to identify best ways (aka use cases) of applying the e-hryvnia and explore its strengths and weaknesses, the architecture of issuing it, and the underlying technology platform. The plan is to unveil a completed concept before 2022 is over.

Only when this has been accomplished will the NBU be able to draw up a legal framework, set requirements for this CBDC technology, and choose a technology provider to run an e-hryvnia issue in test mode. The outcome will determine the feasibility of a full-scale issue. The designated technology provider will be selected through a transparent competition (most likely in 2023).

In addition, the state enterprise Ukrainian Intellectual Property Institute (Ukrpatent) is currently implementing the registration of the e-hryvnia trademark at the NBU’s request. Please note that the term e-hryvnia only refers to an NBU-issued CBDC and is not in any way related to other payments instruments (digital currencies such as bitcoin, bonus programs, etc.).

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