Representatives of some central banks presented their initiatives around the central bank digital currencies (CBDCs) in the one-day conference that was held in Kyiv, Ukraine last week.
The event was hosted by the National Bank of Ukraine (NBU), the central bank of the country, which has started its digital currency pilot in 2018.
Roman Hartinger, head of innovative development department, said:
“The central bank wanted to test its ideas and conclusions with the banking community and stimulate the discussion.”
The discussion is taking place at a time when the US and China are seriously exploring the possibility of issuing a CBDC. However, it seems that China is lagging behind the US in this regard.
NBU exploring digital currency
In early 2016, Ukraine’s central bank started to explore the digital currency dubbed as ‘e-hryvnia’. In 2018, NBU tested the token that runs on a Stellar blockchain fork or a modified copy.
The tests results showed:
“There are no fundamental advantages in using specifically the distributed ledger technology (DLT) to build a centralized e-hryvnia issuance system.”
Nevertheless, NBU does not exclude an alternative “decentralized” model in which several trusted payment processors would issue the local digital currency ‘e-hryvnia’.
The pilot was put off, awaiting legislation regulating digital assets in the country. Although some proposals have been circulated by local authorities, the legislation has yet to be passed.
Cryptolydian earlier reported that Ukraine’s regulatory ministries have concluded that the crypto market does not need government intervention as it can be regulated by the cryptocurrency protocol and enforced consensus rules.
In addition, Ukrainian officials consider that blockchain technology is ‘self-regulating’ due to their open-source protocols. Thus, they strongly believe that the crypto market does not need government intervention.
Instead, the officials seek to develop policies for digitization, e-governance and information society development.
Moreover, Ukraine’s regulatory policy aims to encourage participation in the development of digital assets and adoption of blockchain technology.