The Ukrainian government is pushing forward with its plans for a central bank digital currency (CBDC), with Ukraine’s central bank granting official permission to issue digital money. The National Bank Of Ukraine Grants Official Permission To Issue Digital Money According to a Thursday statement, Ukrainian President Volodymyr Zelenskyy has signed a bill titled On Payment Services, which permits the country’s central bank to issue a CBDC, the digital hryvnia. The new law gives the NBU the authority to establish regulatory sandboxes for testing payment services and instruments based on emerging technologies. According to the statement, the new legislation also demands tight coordination between the Ukrainian central bank and local entrepreneurs in the payment industry, taking into account private sector demand. The On Payment Services Act, which was first passed by the Ukrainian parliament in late June, intends to establish open banking, which is the practice of providing access and control over customer financial information through third-party apps. The bill is intended to spur the growth of financial technology in the nation, allowing private fintech firms to collaborate with banks and expand their commercial prospects. The newly signed bill is also intended to conform Ukrainian laws to the legal framework of the European Union, which would ultimately allow the country’s payment system to be integrated with the EU’s, according to the statement. The legislation is based on current needs and takes into consideration European regulatory standards, such as the Payments Service Directive 2 and the E-Money Directive. Over The Last Several Years, The NBU Has Been Investigating The Possibility Of Creating A Digital Money As previously reported, the NBU has been investigating the possibility of issuing a digital currency for several years, highlighting the potential of a CBDC to boost public trust in the central bank and its financial services. However, the bank remained worried about potential associated concerns such as the influence on financial stability and potential challenges to the traditional banking system. Ukraine’s Ministry of Digital Transformation partnered with the Stellar Development Foundation earlier this year to establish a plan for digital assets and CBDC infrastructure.
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