To seek clarity into the feasibility and technicality of a central bank digital currency (CBDC), the National Bank of Ukraine (NBU) has published a concept note on the launch of a digital currency dubbed e-hryvnia to representatives of financial institutions and participants in the crypto economy.
According to the release, the digital currency note will provide an additional option to the present options of money.
Similar to the other forms of digital money, e-hryvnia is going to be the electronic form of money in Ukraine with traditional benefits. Notably, the introduction of the digital e-hryvnia will give a big boost to the economy as it will be used to supplement the cash and non-cash forms of Ukrainian money.
Additionally, the introduction of CBDC in Ukraine will allow a range of benefits, such as minimal overall currency management, and reduced settlement risk, amongst others.
It will also provide the general public with a convenient electronic form of central bank money together with safety. Similarly, the project will be made available to all sectors, legal authorities, banking and financial institutions, and state bodies.
Interestingly, the digital e-hryvnia will ensure cross-border payments is possible, hence making it faster, more accessible, and more transparent. Aside from the numerous benefits, the result of the study will put into check the needs and interests of potential users as well as members of the crypto market.
Countries Unending Efforts to Launch CBDC
It is no news that tens of nations around the world are exploring the creation of their own digital currency, mostly with the aim of innovating and easing the burden off their payment ecosystem. Most monetary authorities also intend to develop their CBDC with the intention of making both the fiat and digital monies co-exist.
In November, the Reserve Bank of India (RBI) selected nine institutions to take part in the testing of the nation’s first digital rupee. The program will enable the grounds for secondary market transactions involving government securities.
Recently, the central bank of Japan commenced the pilot testing phase of CBDC with several financial institutions by 2023. The experiment which will involve Japan’s top three banks and other regional banks will run successfully for two years.