Employees of the Ministry of Digital Affairs are the first in Ukraine to begin to receive salaries in digital hryvnias

Main article: National cryptocurrencies

2021

Employees of the Ministry of Digital Affairs will be the first in Ukraine to start receiving salaries in digital hryvnias

Employees of the Ministry of Digital Transformation are the first in the country to begin to receive salaries in digital hryvnias. This was told by the head of the department Mikhail Fedorov.

Honestly: as one of the first pilots, we have on the table the question of paying salaries to employees of the Ministry of Digital Transformation in an electronic hryvnia. Ukrainians rank first in the world in adaptability to virtual assets - and this openness of technology can be one of our advantages in the world. It also attracts additional investments in business, in the country, "he said in an interview with TSN.

Employees of the Ministry of Digital Affairs can be the first to receive a salary in a virtual hryvnia

According to Fedorov, the digital currency must be carefully tested before launch. The use of an electronic hryvnia really has the potential by software to establish possible directions and conditions for the use of cash subsidies, for example, to limit their misuse, the minister said.

However, in order to introduce social payments in the electronic hryvnia in the country, Mikhail Fedorov continues to test this technology. By mid-August 2021, the Ministry of Digital Affairs is studying the experience of other countries that have already launched a similar currency format. The introduction of the digital hryvnia to a large extent depends on the implementation of its "technical filling," the head of the Ministry of Digital Affairs added.

According to the authors of the initiative on the use of a digital hryvnia, it will be able to solve several problems in the financial market, including:

• connection to the Ukrainian financial system of large payment services such as Stripe and PayPal;
• stimulating the emergence of new payment startups that can create healthy competition and activate the development of the industry;
• opportunity for existing companies to stimulate business development by connecting banks and fintech projects to their services.^[1]

The President of Ukraine signed a law allowing the Central Bank to release a digital hryvnia

At the end of July 2021, President of Ukraine Volodymyr Zelensky signed a law that allowed the Central Bank to release a digital hryvnia. This is stated on the website of the head of state.

We are talking about the law "On Payment Services," designed to adapt Ukrainian legislation to the legal field of the European Union (EU) and in the future integrate the payment system of Ukraine with the EU system. According to the document, the National Bank of Ukraine (NBU) will also receive the right to create a "regulatory sandbox" - a platform for testing innovative services, technologies and tools in the payment market.

President of Ukraine Volodymyr Zelensky signed a law allowing the Central Bank to release a digital hryvnia

The new law is based on modern requirements and takes into account the norms of European regulatory acts, the press release said.

The law also creates conditions for the introduction of the open banking concept in Ukraine, which should combine various payment service providers and technology platforms into a single payment ecosystem. It is planned that Open banking will work in Ukraine in 2023.

It is expected that the law will stimulate the development of financial technologies in the country, which will allow private fintech companies to establish cooperation with banks and get more opportunities for business.

By mid-2021, the NBU was closely monitoring the release of the digital currency over the past years, indicating the potential of CBDC (the digital currency of the central bank) to strengthen public confidence in the central bank and its financial services. However, the bank remains largely concerned about the potential risks associated with CBDC's impact on financial stability and the traditional banking system.

Earlier, the Ukrainian parliament adopted the law "On virtual assets." The document regulates cryptocurrency operations in the country, classifying them as an intangible good.^[2]

Ukraine plans to launch a digital hryvnia in January 2024

Ukraine plans to launch a digital hryvnia in January 2024. This was announced by the Ministry of Digital Transformation of the country on July 21, 2021.

According to the plan and strategy for the development of the virtual asset market, which the agency announced, the implementation of this project will be carried out as part of the following steps:

• September 2021 - adoption of the law on virtual assets;
• November 2021 - introduction of anti-money laundering policies and procedures for service providers in the field of virtual assets and their clients;
• May 2022 - the incorporation in the legislation of a simplified mechanism for the "tokenization" of assets, the integration of virtual assets into the financial sector;
• March 2023 - creation of infrastructure for issuing virtual assets;
• January 2024 - the introduction of the digital currency of the Central Bank;
• May 2024 - at least 10% of the business "tokenized" assets or use "tokenized" assets in their activities, 47% of Ukrainians use virtual assets.

Ukraine is going to launch a digital hryvnia in January 2024

At the same time, Ukraine itself should get into the top 10 countries with its own cryptocurrencies, they count on the Ministry of Digital Affairs.

Director of the Department of Strategy and Development of the National Bank of Ukraine Arsen Makarchuk noted that virtual assets will become a significant phenomenon in public administration and human relations over the next five years. Therefore, the National Bank of Ukraine as an independent regulator is interested in making further processes using virtual assets as convenient, safe as possible, as well as profitable for all market participants and the population of Ukraine.

The launch of the virtual asset market is a powerful factor in the economic growth of Ukraine. Its development will contribute to the creation of new jobs, attracting investment and strengthening the competitiveness of our jurisdiction in the international space, "said Ukrainian Deputy Minister of Digital Transformation for IT Development Alexander Bornyakov.[3]

Ukraine begins to create a national digital currency based on the Stellar blockchain

In early January 2021, the Ministry of Digital Transformation of Ukraine announced the conclusion of an agreement with the non-profit Stellar Development Foundation from San Francisco on the development of digital currency.

The main points of the signed memorandum of understanding relate to the following areas:

• cooperation in the development of the virtual asset market in Ukraine;
• support for projects related to virtual assets;
• introduction and regulation of the circulation of steeblocks in Ukraine;
• promoting the development of the digital currency of the central bank of Ukraine.

Ukraine begins to create a national digital currency based on the Stelalr blockchain

We continue to work on creating a legal environment for the development of virtual assets in Ukraine, "says Deputy Minister of Digital Transformation of Ukraine Oleksandr Bornyakov, commenting on the deal with Stellar. - In particular, cooperation with Stellar Development Foundation will contribute to the development of the virtual asset industry in Ukraine and its integration into the global financial ecosystem. Another important aspect of this cooperation is the contribution to the development of the infrastructure of the Ukrainian national digital currency.

The Ukrainian authorities, when creating a national cryptocurrency, intend to use the Stellar blockchain platform, which allows for real-time financial transactions. Stellar Development Foundation will officially begin its activities in Ukraine in August 2021. The company noted that it will help the Ministry of Digital Affairs develop a strategy for virtual assets and facilitate the development of a national digital currency.

The National Bank of Ukraine has been exploring the possibility of issuing a state digital currency since 2017. Since that time, the regulator several times mentioned the "private version of the Stellar blockchain" as part of a pilot project to create an "e-hryvnia."^[4]

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