Ukraine’s Central Bank Runs Digital Currency Pilot Using Stellar

The Stellar Development Foundation announced today that the Stellar blockchain will be used to pilot an electronic version of the hryvnia, the national currency of Ukraine. The pilot, being carried out by FinTech firm Bitt and TASCOMBANK, will be overseen by the country's central bank with the encouragement of the Ministry of Digital Transformation.

In January, the ministry announced it had partnered with the Stellar Development Foundation, which promotes the use of XLM cryptocurrency and the Stellar blockchain, to create a central bank digital currency—something the National Bank of Ukraine had been exploring since 2017. CBDCs leverage decentralized ledgers such as blockchains to enable quicker, more efficient payments in the national currency.

"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," said Deputy Minister of Digital Transformation Oleksandr Bornyakov in a press release.

Ukraine's relatively quick path from partnership to trial means it is well ahead of most other European countries and the European Central Bank in developing a digital currency. Most central banks are still researching potential use cases of CBDCs.

“With the rapidly growing impact of virtual assets on our everyday life and economic landscape, it is essential to utilize the advantages of blockchain technology and new related products as a part of the bank’s long-term market strategy," he said.