NBU prepares the way for a digital currency with a second round of market place tests

NBU prepares the way for a digital currency with a second round of market place tests
Ukraine's NBU will run a second round of tests in the use of a digital currency as it moves towards developing a e-hryvnia / bne IntelliNews
By bne IntelliNews March 8, 2024

The National Bank of Ukraine (NBU) has unveiled plans for a second phase of e-hryvnia testing slated for later this year, as the regulator prepares the ground to launch its own digital currency, the NBU said in a statement on March 7.

Unlike the inaugural tests in 2018, which were confined to a closed network involving NBU personnel and select participating companies, the new tests are on a broader basis with invited banks, non-bank financial institutions, and their clientele to test the e-hryvnia's functionalities.

Andrey Podderegin, Director of the Department of Payment Systems and Innovative Development at the NBU, emphasized the inclusive nature of the upcoming tests.

"During testing, we plan to study the effectiveness of the selected technological platform and the ease of using e-hryvnia for payment transactions, its advantages in practice, which will help make a decision on the feasibility of its large-scale release in Ukraine,” he said.

The NBU said it is moving slowly towards the potential introduction of e-hryvnia and is considering its impact on Ukraine's financial ecosystem meticulously.

Podderegin said: "The e-hryvnia will not become a replacement for cash or non-cash forms of the hryvnia, but will be their addition."

The test follow on from similar test by the Central Bank of Russia (CBR) which remains the intellectual leader in banking reforms in Eastern Europe. The CBR has also said that it hopes to create a digital ruble to enhance the operations of the interbank market, but this will not be a cryptocurrency that can be used in commercial transactions.