The National Bank of Ukraine (NBU) has begun preparing a pilot project for a digital hryvnia, which should become an important addition to cash. Testing this digital currency will allow assessing its effectiveness, convenience, and popularity among users before making a decision on mass implementation.
What is e-hryvnia and how will it work?
The digital hryvnia is a new form of national currency that will exist exclusively in non-cash form. It will be controlled by the NBU and will perform all the functions of traditional money. In particular, the digital hryvnia can be used for transfers between individuals (P2P), payment for goods and services, making payments to the state, charitable donations, as well as receiving wages and social benefits.
Deputy Chairman of the NBU Oleksiy Shaban noted that the e-hryvnia corresponds to global trends: central banks of many countries, such as the EU, China, India and Turkey, are already testing or implementing their digital currencies. The main goal of the e-hryvnia is to ensure modern and fast payments, financial security and promote the digitalization of the economy.
E-hryvnia will have several significant advantages. In particular, it will allow for the creation of programmable payments, such as automatic transfers or payments under certain conditions. In addition, the use of digital currency will reduce the risks of banking crises and ensure the stability of the financial system. Digitalization of the economy and an increase in the level of financial inclusion will contribute to the development of electronic payments in Ukraine.
Another important feature of the e-hryvnia is its high level of privacy protection. Unlike cryptocurrencies, the digital hryvnia will preserve users' privacy, as the NBU will not have access to personal data.
The NBU is currently preparing a pilot project that will be based on DLT (Distributed Ledger Technology). This means that testing will take place with the participation of real users and payment services, which will allow obtaining real data on the effectiveness and convenience of the digital hryvnia.
The main goal of the pilot project is to test the ability of the e-hryvnia to perform the functions of money and its ability to meet the needs of users. However, as Shaban noted, the e-hryvnia should not replace cash. Cash will remain in circulation, and the digital hryvnia will become only an additional form of currency that can be chosen for making payments.
Despite significant advantages, the introduction of the digital hryvnia may face several problems. One of them is the need to update the legislation to provide a legal basis for the new payment instrument. In addition, the infrastructure of banking and payment systems must be ready to work with the new digital currency. No less important is the level of trust among citizens, which may become an obstacle to the mass introduction of the e-hryvnia, so the NBU should conduct an active information campaign.
In general, the digital hryvnia can become an important stage in the development of Ukraine's financial system, contributing to its modernization and integration with global economic processes.
