In Ukraine, Former Commercial Bank is About to Test Digital Currency on Stellar’s Blockchain
The pilot program takes effect with the supervision of the central bank of Ukraine and will test the use of a digital hryvnia for payroll payments.
One of Ukraine’s oldest commercial banks, TASCOMBANK, is beginning a testing program for a digital version of hryvnia, that nation’s legal tender, that will leverage the Stellar blockchain.
The Stellar Foundation, a non-profit organization that backs up the development and growth of Stellar, announced the news on Tuesday in a press release that got shared through its social networks.
According to the information, Tascombank would release the pilot program in parallel with the fintech company BittGlobal. Tascombank intends to test various payment use cases of digital currency. The electronic hryvnia would get tested on the Stellar Blockchain and applied through the BittGlobal platform’s digital currency management system.
Ukraine to Test Digital Currency for Payroll
The pilot program will take effect with the National Bank of Ukraine’s supervision and with the support of the Ministry of Digital Transformation. Speaking about the initiative, the Deputy Minister of Digital Transformation, Oleksandr Bornyakov, said this pilot project will serve as the technological ground for the issuance of electronic money and is the next step in advancing the innovation of financial and payments infrastructure in Ukraine.
The Stellar Foundation highlighted that the goal is to set various tests on the issuance of electronic money on an open blockchain. As such, the pilot program will seek to test the effectiveness of the digital currency on public employee payroll, peer-to-peer payments, and merchant payments.
According to the report, the pilot will test the use case for payroll payments with the employees of Diia, a public information technology (IT) solutions company in Ukraine.
The digital currency will get built according to existing e-money legislation in Ukraine, and the pilot might start in 2022. While the companies did not highlight an exact timeframe for the project, Valeriy Danilenko, Tascombank vice president responsible for e-commerce, pointed out to CoinDesk that the goal is to carry out a pilot test in the shortest reasonable time.
Europe and the Development of CBDC
The government of Ukraine, a country with one of the highest rates of crypto adoption according to a 2020 ranking by Chainalysis, is curr to innovate its payments system.
The nation’s parliament approved a law to regulate payment methods in July. The language of that regulation puts central bank digital currency (or CBDC) in the same category as cash or electronic money. Around the same time, President Volodymyr Zelensky signed a law that would allow Ukraine’s central bank to issue a CBDC, according to a CoinDesk report.
Also, before this legislation, the Ministry of Digital Transformation of Ukraine had already announced a partnership with the Stellar Foundation for a national digital currency creation, Decrypt reported.
Ukraine’s most recent efforts place the nation far ahead of many European countries in plans to issue a CBDC. In October, the European Central Bank launched a two-year experiment in a digital euro; although the entity has highlighted that the European Union will not see a CBDC until -at least- 2025. Meanwhile, about 80 central banks worldwide are actively exploring digital currencies.
By: Jenson Rivas
