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Ukraine’s CBDC Plans: Could Stellar Lumens Be the Foundation?

Ukraine is considering the development of a Central Bank Digital Currency () based on to facilitate retail cryptocurrency transactions. The National Bank of Ukraine (NBU) recently released updated information regarding its plans for the introduction of a central bank digital currency.

Excerpts from the press release reveal that the central bank is exploring the implementation of electronic hryvnia functions, allowing retail users to utilize it for cryptocurrency trading. This addition will complement other use cases, including retail payments and cross-border transactions, that will be available for the electronic hryvnia. This announcement was made by Deputy Chairman of the NBU, Alexey Shaban.

The Evolution of Ukraine's Payment Infrastructure

The development and implementation of the electronic hryvnia could mark the next step in Ukraine's payment infrastructure evolution. It aims to digitize the economy, further promote non-cash transactions, reduce transaction costs, increase transparency, and enhance trust in the national currency as a whole.

Shaban added that Ukraine is betting on CBDC to become “one of the key elements of high-quality infrastructure development for the virtual asset market in Ukraine.” This move is expected to strengthen the country's currency sovereignty while maintaining price and financial stability.

In 2021, the Ministry of Digital Transformation of Ukraine and the Stellar Development Foundation signed a Memorandum of Understanding and Cooperation. Under this memorandum, they are working together to develop a strategy for the virtual asset market's growth in Ukraine.

Key Collaborative Areas in the Memorandum Include

  1. Development of the Virtual Asset Market in Ukraine: The partnership aims to foster the growth of the virtual asset market within Ukraine.
  2. Support for Virtual Asset-Focused Projects: Collaboration to provide support for projects specializing in virtual assets.
  3. Implementation and Regulation of Stablecoins: Efforts to implement and regulate the use of stablecoins in Ukraine.
  4. Facilitating the Development of the National Bank's Digital Currency: Working together to promote the development of the National Bank's digital currency in Ukraine.

Ukraine's exploration of a CBDC based on Stellar Lumens reflects the country's commitment to staying at the forefront of the digital financial landscape. If successfully implemented, this move could pave the way for a more digitally inclusive economy while bolstering Ukraine's financial stability and currency sovereignty. The collaboration with the demonstrates Ukraine's dedication to fostering a thriving virtual asset market within its borders.

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