The Ukrainian government has decided to use the Stellar Blockchain Network as a support to build the nation's central bank digital currency (CBDC).
Ukraine is working to integrate into the future global financial ecosystem
According to an announcement on Monday, Ukraine's Ministry of Digital Transformation and the Stellar Development Foundation (SDF) have signed a Memorandum of Understanding formulated on the active blueprint of an “ecosystem of virtual assets and a national digital currency of Ukraine”.
The National Bank of Ukraine is working on the possibility of developing and implementing a CBDC from 2017 and the collaboration with Stellar - not to be confused with Stellar Profit - will now be the foundation on which to build a virtual currency, according to Deputy Minister for Digital Transformation and IT Oleksandr Bornyakov.
The National Bank of Ukraine has mentioned the use of a "private version of the Stellar blockchain" as part of its E-hryvnia pilot project in 2019. Ukraine therefore joins large global movements to implement a currency-anchored CBDC national, which are likely to fill the crypto narrative of the new year.
“The Ministry of Digital Transformation is working to create the legal environment suitable for the development of virtual assets in Ukraine,” Bornyakov said in a statement. The partnership with the Stellar Development Foundation promises to be decisive for the growth of the digital assets segment in Ukraine and for its integration with the global financial system, continued the deputy minister.
Stellar blockchain is the right choice for a public-private partnership
Stellar, the cryptocurrency and nonprofit organization launched in 2014 by Ripple co-founder Jed McCaleb, is no stranger to collaborating with government institutions. It was selected last month by the German bank Bankhaus von der Heydt (BVDH) as a means to issue a stablecoin in euros, the German regulator BaFIN approved the issuance of tokenized bonds on Stellar.
The CEO of the Stellar Development Foundation, Denelle Dixon, said the partnership with the Ukrainian government and other stakeholders to digitize the hryvnia will be officially launched this month. “We have discussed key considerations for issuing a CBDC with governments and institutions around the world.
It is important to remember that many, if not all, of these organizations were not designed to be technology companies and are supporting many segments in the public sector, ”Dixon said.
“This makes a public-private partnership really essential in order to achieve this result”. Stellar's Consensus Mechanism (SCP) offers issuers unique certainties they would not have on other public blockchains (such as issuer-imposed purpose), according to Stellar COO Jason Chlipala. "SCP would serve a central bank well, reflecting the relationships of trust it would maintain and ultimately give it a significant vote in the consensus protocol," Chlipala said.
