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NBU to Focus on Three Usecases for E-Hryvnia

NBU to Focus on Three Usecases for E-Hryvnia

The National Bank of Ukraine (NBU) has presented findings of the market survey on the prospective demand for the central bank digital currency, e-hryvnia, and its possible use cases. The options are described in greater detail in the Report on findings of possible introduction of e-hryvnia.

“Central banks around the globe are exploring the possibility of issuing their own digital currencies. The NBU was one of the first central banks in the world to examine such an option,” – said NBU Governor Kyrylo Shevchenko.  “We’ve already had practical experience in implementing a pilot project to issue e-hryvnia in 2018. Now, we are focused on finding an effective usecase. To find the options that will satisfy customer needs and niches for the use of e-hryvnia and to determine possible effects of its introduction, we decided to request the opinion of financial market experts and held a comprehensive survey. I believe that a constructive dialogue with the market will be the key to our further successful work along this line.”

The survey was conducted this year and targeted 100 experts of the financial market of various expertise, such as retail and innovations, corporate business, financial markets, digital transformation of the state authorities, and virtual assets.

The survey covered 30 questions on six usecases for e-hryvnia:

1. Instrument for retail cashless payments (P2P, P2B, В2В)

2. Instrument for targeted walfare payments (G2P).

3. Instrument for settlements of securities and other financial instruments (B2B).

4. Instrument for corporate payments (B2B).

5. Instrument for cross-border payments (B2B, Р2Р, Р2В).

6. Interest bearing financial instrument.

According to the financial market players, the most promising usecase for e-hryvnia is retail cashless payments (mostly Р2Р transfers and e-commerce). The second usecase according to the scored points is cross-border payments (mainly P2P).

The targeted walfare payments (G2P) were rated last but one. At the same time 77% respondents support this usecase if it comes with a “programmed” targeted money option for government transfers (that can only be used for intended purpose and within a certain timeframe). So, this usecase can effectively complement e-hryvnia’s function for retail cashless payments.

Also, respondents reported a keen interest in using e-hryvnia for virtual asset transactions. Furthermore, most surveyed experts say e-hryvnia should be based on blockchain technology. Considering the volume of the virtual asset market in Ukraine and similarity of technologies, the NBU considers that using e-hryvnia for virtual asset circulation is to be further examined.

Respectively, the NBU will continue examining options for e-hryvnia decided by the survey and with consideration of the NBU’s research and the global experience:

  • e-hryvnia for retail cashless payments with the "programmable" money function and the option of targeted welfare payments;
  • e-hryvnia for  transactions related to the virtual assets sphere (for example, exchange, reserve and other transactions with virtual assets);
  • e-hryvnia for cross-border payments.
For reference:

The NBU has been studying the possibility of issuing the central bank digital currency, e-hryvnia. Consideration of the issue started in 2016. In 2018, a pilot project was launched to issue the e-hryvnia for blockchain-based retail payments. Based on the outcomes of the pilot the Analytical Report on E-Hryvnia was published and in the International Conference: Central Bank Digital Currencies: New Opportunities for Payments held in 2020

 

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