National Bank of Ukraine Introduces the CBDC Project, Dubbed E-hryvnia

The National Bank of Ukraine (NBU), the central bank of Ukraine responsible for strengthening the national currency unit, has introduced the e-hryvnia concept project.

According to the press release shared on November 28th, the project was presented to “the representatives of banks, non-banking financial institutions, and the virtual asset market” representatives.

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In the press release, NBU noted that the primary intention of e-hryvnia is to make it function like physical money, “supplementing the cash and non-cash forms of the hryvnia.” On top of that, NBU emphasized that when launched, e-hryvnia should be accessible to all segments of the population, including banks and non-bank financial institutions, legal entities, citizens, and state bodies.

The Deputy Chairman of the National Bank, Oleksiy Shaban, when talking about the project of e-hryvnia, noted:

The development and implementation of the e-hryvnia can be the next step in the evolution of the payment infrastructure of Ukraine, it will contribute to the digitalization of the economy, the further spread of cashless payments, the reduction of their cost, the increase in the level of their transparency and the increase of trust in the national currency in general.

Nevertheless, Shaban added that e-hryvnia can bring a positive impact in strengthening monetary sovereignty and economic security.

The National Bank of Ukraine is looking into three use cases for its central bank digital currency (CBDC). The first is “e-hryvnia for retail non-cash payments with the possible functionality of programmed money.” The second option is “e-hryvnia for use in the field related to the circulation of virtual assets” and “e-hryvnia to enable cross-border payments.”

It is worth noting that, initially, the project “E-hryvnia” was launched  in September 2021 with the goal “to determine the feasibility of a large-scale issue of a digital form of the hryvnia in Ukraine on the basis of conducted research.”

At the end of its press release, NBU noted that it will continue to develop e-hryvnia, taking into consideration “the potential impact of its introduction on the financial system of the state.”