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0 CommentsOne of Ukraine’s oldest commercial banks, Tascombank, is launching a Stellar-based pilot for an electronic hryvnia, a digital version of Ukraine’s national fiat currency. The pilot, supported by Ukraine’s Ministry of Digital Transformation, will test an electronic hryvnia in handling payroll for public employees along with peer-to-peer and merchant payments.
In a statement published Tuesday, the bank said that the digital hryvnia will be built and tested on the Stellar network and be deployed via global fintech platform Bitt’s digital currency management system (DCMS). The pilot will test the digital currency’s effectiveness in public employee payroll, peer-to-peer payments, and merchant payments.
Valeriy Danilenko, Tascombank’s deputy chairman responsible for e-commerce, said Ukraine’s Ministry of Digital Transformation supports the pilot, and all “e-money activities” by the commercial bank are under the regulatory supervision of the central bank, NBU. According to the statement, the electronic hryvnia will be built under Ukraine’s existing e-money legislation, and the pilot is anticipated to kick off in 2022.
“We aim to conduct a pilot in the shortest reasonable time, and we are working on this together with partners and stakeholders in Ukraine,” Danilenko said in an email to CoinDesk. However, he did not specify the duration of the test.
The Stellar Development Foundation (SDF) announced Tuesday a private electronic hryvnia pilot launched by Tascombank and fintech company Bitt.
The electronic hryvnia pilot is being implemented under the supervision of the National Bank of Ukraine and is supported by the Ministry of Digital Transformation (MDT).
Oleksandr Bornyakov, deputy minister of the MDT, said that the pilot project will provide 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.”
SDF CEO Denelle Dixon told Cointelegraph that the pilot work has already kicked off, with the first test including programmable payroll for public employees at Diia, a public IT solutions enterprise owned and supported by the MDT of Ukraine.
“This regulated electronic hryvnia will be privately issued e-money on blockchain technology, built under Ukraine’s current e-money legislation,” Dixon noted.
The initiative aims to test the issuance of electronic money on an open blockchain. Tascombank is responsible for building and testing the electronic hryvnia on Stellar to deploy it on Bitt’s transaction network known as Digital Currency Management System, or DCMS.
“Bitt’s DCMS will equip Tascombank with all of the technology required to securely mint, store, issue, distribute, and redeem the electronic hryvnia,” Bitt CEO Brian Popelka said.
While Bitt is providing a transaction network, SDF will help Tascombank “configure for their asset control needs while maintaining the interoperability and flexibility of an open ledger,” Dixon noted.
The Ukrainian government has been actively exploring Stellar for digital currency implementations. In January 2021, the MDT first partnered with the SDF to develop a digital asset and infrastructure strategy for a central bank digital currency.
“We continue to provide input and guidance to MDT on their strategy work,” Dixon stated, adding that the electronic hryvnia pilot project is a separate workstream.
Monetary authorities the world over are amping up research and trials of central bank digital currencies (CBDC). According to the Atlantic Council’s CBDC tracker, around 80 countries actively explore digital currencies backed by central banks. Most recently, in November, Nigeria launched the eNaira, reportedly recording nearly 500,000 wallet downloads in the first three weeks. In October, the European Central Bank kicked off a two-year experiment into a retail CBDC, which consumers can use to make or receive payments.
