Ukraine plans to launch its own central bank-run cryptocurrency in 2024, the director of the Digital Economy Directorate of Ukraine tells Verdict. However, Yulia Parkhomenko adds that it all depends on the outcome of the conflict with Russia.
“Because of the war we didn’t start our pilot project, but when we hope to start a couple of them at the beginning of the next year,” she says.
Ukraine is currently collaborating with etherum scaling platform Polygon and decentralised open-source digital currency protocol Stellar to create its own central bank digital currency, a so-called CBDC.
Speaking at the tech business event GITEX in Dubai, Parkhomenko says that for now, the Digital Economy Directorate is working on smaller ministry projects.
Verdict is attending the event as part of a press trip organised by Dubai’s Department of Economy and Tourism.
Parkhomenko adds that the hope is that the National Bank of Ukraine will be soon able to roll out the platform fully across the nation.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
“I think it will be in 2024,” Parkhomenko says.
The Ukraine CBDC is one of many similar projects
Ukraine’s e-hryvnia project is one of several similar CBDC initiatives launched across the world.
While only the Bahamas, Jamaica and Nigeria have launched their own CBDCs so far, over 100 similar projects have been started across the planet, according to website CBDC Tracker.
Former chancellor of the Exchequer Rishi Sunak announced last year that the UK would be exploring a similar CBDC project to the one being developed by Ukraine, nicknaming it Britcoin.
It’s not a mystery why Ukraine and other countries are exploring creating a CBDC of their own as they have several benefits.
For starters, they may help fight financial exclusion and reduce the number of unbanked citizens. Digital currencies could be made available to unbanked populations by granting access to digital wallets on smartphones, provided by central banks.
Digital currencies can also offer greater transparency and oversight of transactions taking place through the system. This would help reduce fraudulent activities such as tax evasion and money laundering.
CBDCs would also allow individuals and corporations to carry out real-time, feeless transactions with currencies backed by central banks.
However, privacy advocates have warned that the heightened traceability of CBDCs could raise the risk of governments monitoring and violating users’ privacy.
In just a few weeks after Russia’s illegal invasion, Ukraine had received close to $100m in crypto asset donations.
In August, the vice prime minister of Ukraine, Mykhailo Fedorov, revealed that the country had spent $54m in cryptocurrencies to buy drones, and armoured vests to cover other military expenses.
GlobalData is the parent company of Verdict and its sister publications.