The National Bank of Ukraine (NBU) has started preparing a pilot project of digital hryvnia, which should be an important complement to cash. Testing this digital currency will evaluate its efficiency, convenience and popularity among users before making a mass implementation decision.
What is E-Hryvnia and how will it work?
Digital hryvnia is a new form of national currency that will exist exclusively in cash. 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 of goods and services, payments in favor of the state, charitable donations, as well as receiving wages and social payments.
NBU Deputy Chairman Alexei Shaban noted that the hryvnia is in line with global trends: central banks in many countries, such as the EU, China, India and Turkey, are already testing or implementing their digital currencies. The main purpose of e-hryvnia is to ensure modern and rapid payments, financial security and promote digitalization of the economy.
E-hryvnia will have several significant advantages. In particular, it will allow you to create 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. The digitalization of the economy and the increase in the level of financial inclusion will contribute to the development of electronic payments in Ukraine.
Another important feature of e-hryvnia is the high level of confidentiality. Unlike cryptocurrencies, the digital hryvnia will retain the privacy of users as the NBU will not have access to personal data.
The NBU is currently preparing a pilot project, which will be based on DLT technology (Distributed Ledger Technology). This means that testing will be held with the participation of real users and payment services, which will allow you to get real data on the efficiency and convenience of digital hryvnia.
The main purpose of the pilot project is to check the ability of e-hryvnia to perform the functions of money and its ability to meet the needs of users. However, as the Shaban noted, the e-hryvnia should not replace cash. Cash will remain in circulation, and the digital hryvnia will only be an additional form of currency that can be chosen for payments.
Despite significant advantages, the introduction of digital hryvnia may face several problems. One is the need to update the legislation to provide a legal basis for a new payment instrument. In addition, the infrastructure of banking and payment systems should be ready to work with the new digital currency. Equally important is the level of trust among citizens, which can be an obstacle to the mass introduction of e-hryvnia, so the NBU should carry out an active information campaign.
In general, digital hryvnia can be an important stage in the development of Ukraine's financial system, facilitating its modernization and integration with global economic processes.
