What is emission in simple terms.

Monetary issues are extremely important for every country. For example, in every country concepts such as what emission or the release of new banknotes are of great importance. In general, emission is a very important process. 

To understand what emission is and how it works in simple terms, one should also touch upon the topic of securities. Overall, it is a process that contributes to economic goals, while whether to issue money or papers is a secondary question. 

What is emission? 

Theoretically, emission is the process of issuing money or securities into circulation. However, a goal must be formulated at the outset for what it is needed and all possible consequences must be calculated. This term can apply to both cash and non-cash money, as well as to stocks, bonds, and other financial instruments.

The simplicity of the process does not make it trivial. Emission has many types that differ from one another. To clarify for those who want to understand it simply, one can highlight two main types: 

1. Monetary emission — the issuance of new banknotes and coins into circulation.
2. Emission of securities — the issuance of new stocks, bonds, or other financial instruments by companies, banks, or government bodies.

Each of these processes differs both in stages and in results. Each of these types has its own characteristics, goals, and consequences that are important to understand. And neither of these processes can replace the other. 

Monetary emission

So, one of the most popular types of emission is monetary. It implies an increase in the money supply in the country. For example, the National Bank of Ukraine (NBU) may print more hryvnias to support the economy. This is done either to cover the budget deficit or to stimulate economic growth.

Why is such emission needed:

1. There is a deficit in the budget. If government income is less than expenses, emission can be a way to "plug holes".
2. If it is necessary to stimulate the economy and its processes. An increase in the money supply can lead to an increase in purchasing power.
3. In case of an emergency. In a crisis or wartime, the government may resort to emission to cover urgent needs.

Such a process has its inevitable consequences. First and foremost, this process affects inflation. An increase in the amount of money in the economy often leads to a rise in prices. There may also be a devaluation of the national currency. If the emission is excessive, the hryvnia may lose its value.

Securities and emission 

When a company or state issues new shares or bonds, it is called securities emission. For instance, a Ukrainian company may issue shares to attract capital for building a new factory.

This process also has its reasons and goals. What is it about: 

1. Attracting investment is necessary. Selling shares helps companies grow.
2. Need to urgently cover debts. Issuing bonds allows funds to be raised to pay off existing obligations.
3. Need for primary or additional financing for projects. The government issues bonds to build roads, schools, and other infrastructure facilities.

Such emission has its advantages. It is beneficial for companies. It is about the possibility of obtaining funds without the need to take loans. It is also beneficial for investors. This is about the possibility of earning on dividends or interest from bonds.

However, there are also risks associated with this process. For companies: if the project fails, they lose the trust of investors. There are also risks for investors. High risk if the company becomes insolvent.

Emission and Ukraine 

Emission is often used in many countries, including Ukraine. If we talk about recent years, the country faces its significant problems: 

1. War. Ukraine continues to recover from the destruction, and the emission of money is often used to cover budget expenses.
2. Inflation. In 2025, the inflation rate remains a current problem, and the NBU is trying to balance between emission and stability.

It should be noted that there are positive aspects. They are not so many, but they also exist. What is it about: 

1. Support for the economy. Emission helps finance the restoration of infrastructure.
2. Strengthening the banking system. The issuance of bonds allows attracting funds to support banks and enterprises.

Emission also has its specific consequences. For example, the risk of hyperinflation. If the emission is not controlled, it will lead to devaluation of the hryvnia. There is also the burden of debts. Issuing securities increases the state's obligations.

Due to these consequences, emission control is necessary. To minimize the negative effects of emission, strict control by the state is essential. In Ukraine, this is the responsibility of the National Bank, which:

1. Establishes limits on the issuance of money.
2. Controls the volume of bonds issued.
3. Regulates monetary policy to prevent inflation.

Moreover, it is necessary to understand how emission affects ordinary Ukrainians. This process has a positive influence: 

1. Increase in salaries and social payments. New money can go toward raising salaries.
2. Financing important projects. Restoration of roads, construction of schools and hospitals.

However, there are also significant downsides for ordinary citizens. What is it about: 

1. Rise in prices. The purchasing power of the hryvnia may decrease.
2. Decrease in savings. If inflation is high, savings are devalued.

Overall, emission is a powerful tool that can both help the economy and harm it if used improperly. It is important for emission to be well thought out and controlled, especially in light of the current challenges faced by Ukraine in 2025. It is crucial for ordinary citizens to understand how it works to be prepared for potential changes in the economy. However, it is almost impossible to predict all the consequences of emission in advance.