The National Bank presented the project of electronic hryvnia

What happened? The National Bank presented the draft concept of the e-hryvnia as digital money of the National Bank. The concept is currently being introduced to representatives of banks, non-bank financial institutions, and the virtual asset market for discussion and feedback.

Source. The press service of the National Bank.

Details. E-hryvnia is an electronic form of the monetary unit of Ukraine, which will be a direct obligation of the central bank. Its key purpose, according to the regulator, is to effectively perform all the functions of money, complementing cash and non-cash forms of the hryvnia. The e-hryvnia project was launched in September last year to study the feasibility of a large-scale implementation in Ukraine.

The NBU is currently considering several options for using the e-hryvnia, which will determine its design and main characteristics:

– for retail non-cash payments with the possible functionality of “programmable” money: to make targeted social payments, reduce government spending on administration and control of the targeted use of funds, as well as the use of smart contract technology to program different logic of calculations depending on the occurrence of certain circumstances and facts;

– for the use in the field related to the circulation of virtual assets (for example, for exchange, securing the issue and other operations with virtual assets);

The regulator continues to work on the draft concept of the e-hryvnia together with payment market participants, virtual asset market participants, and government agencies. The result will be the creation of the e-hryvnia concept – with “comprehensive consideration of the interests and needs of market participants and potential users”.

It is worth mentioning that the e-hryvnia was first discussed in 2016. Two years later, the NBU conducted a closed pilot project to test the possibility of using e-hryvnia for payments. Then the regulator issued a limited amount of national currency equivalent to 5443 UAH. Based on the results of the experiment, the National Bank concluded that the e-hryvnia could become an alternative to existing means and instruments of retail payments.