New Ukraine Legislation Lists CBDC As Cash Equivalent

New legislation passed by the Ukrainian parliament addressed central bank digital currency (CBDC) and determined that it was functionally equal to cash or other payment tools, Coindesk reported on Thursday (July 1).

Ukraine’s governing body — the Verkhovna Rada — passed a law concerning payment services that mentions the future CBDC as the “yet-to-be-launched electronic hryvnia,” which is the country’s national currency. A hypothetical CBDC would be considered the same as bank accounts and electronic payments, according to Coindesk.

The National Bank of Ukraine (NBU) has been exploring its own CBDC on the Stellar blockchain since 2018, and though it hasn’t yet launched, it is still a consideration. The NBU published a 2019 report on the e-hryvnia that analyzed the advantages and disadvantages of using decentralized tech for a CBDC, per the article.

The new legislation in Ukraine would make the electronic hryvnia a payment standard, even though the CBDC is not yet launched, according to BeInCrypto. The country’s officials are looking to digitize the economy and Ukraine is among the few countries that have aggressively sought to pass legislation that sees a CBDC as currency.

The changes under the “On Payment Services” law briefly talk about the CBDC without laying a path for adoption. Instead, it mentions payment services and procedures among a list of categories for providers.

As noted, NBU has already been exploring CBDC. A prototype in Ukraine has been tested on the Stellar Lumens blockchain. Ukraine has engaged relevant experts during discussions over the potential of a CBDC. With the current global interest in CBDCs, this move indicates a “concentrated effort in releasing a digital currency,” per the BeInCrypto article.

Despite the global divide, CBDCs are anticipated to flourish despite the queries surrounding their mainstream use. For example, Swiss National Bank Chief Economist Carlos Lenz said the central bank is still in the midst of feasibility studies but has so far not seen the necessity of having a digital franc.