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Tascombank, one of the oldest commercial banks in Ukraine, is readying to test a central bank digital currency (CBDC) under the supervision of the National Bank of Ukraine (NBU). A report unveiled this news earlier today, noting that Tascombank joined hands with global fintech platform Bitt in this trial. Reportedly, the electronic hryvnia will be built and tested on the Stellar blockchain.
According to the , the CBDC will be under Ukraine’s current e-money legislation, and its launch will be on Bitt’s digital currency management system (DCMS). The pilot will launch in 2022 and will test the CBDC’s use in public employee payrolls, peer-to-peer (P2P) payments, and merchant payments. Allegedly, this pilot program has the backing of Ukraine’s Ministry of Digital Transformation.
Commenting on this development, Valeriy Danilenko, Tascombank’s Deputy Chairman, said the involved parties aim to conduct a pilot in the shortest reasonable time. However, he failed to disclose how long the CBDC test would take. Danilenko added that the bank is mulling how many users it will let participate in the pilot, seeing as it will feature citizens, merchants, and institutions.
The Deputy Minister of Digital Transformation, Oleksandr Bornyakov, pointed out that,
This pilot project will serve as a technological basis for the issuance of electronic money, and is the next key step to advance innovation of payment and financial infrastructure in Ukraine.
The race to launch CBDCs continues intensifying
Ukraine’s decision to pilot a CBDC in the coming year comes after the Ministry of Digital Transformation announced the partnership with the Stellar Foundation in January. With the country set to commence testing its electronic hryvnia in the coming year, its CBDC has been relatively fast. However, it is worth noting that NBU has been exploring CBDCs since 2017.
This development places Ukraine ahead of many European countries, seeing as most central banks are currently researching the use cases of CBDCs. Nonetheless, France is the leader regarding CBDCs in Europe after completing a cross-border payments experiment with Swiss banks UBS and Credit Suisse.
Outside Europe, China has achieved multiple milestones with its CBDC after conducting large-scale pilots. The country is set to further test its digital renminbi in the upcoming Winter Olympics. However, The Bahamas is the only country that has managed to its CBDC thus far. The country rolled out its Sand dollar in October last year.
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