E-Hryvnia Without Banks: NBU Announces Launch of New Form of Money.

The National Bank of Ukraine (NBU) plans to launch a pilot project for the e-hryvnia, its own digital currency, in 2025. This was reported by the NBU in response to a request from Economic Truth.

The launch of the e-hryvnia will depend on the readiness of financial market participants, the choice of a technological partner, and the creation of the necessary infrastructure.

'The pilot project will be conducted in an open environment where users and payment services can test the e-hryvnia. The technological basis of the e-hryvnia will be DLT (distributed ledger technology)', NBU explained.

The goal of the pilot project is to evaluate the capabilities of the e-hryvnia as money, satisfy user needs, and test hypotheses regarding programmability.

NBU Digital Currency

The e-hryvnia will become the digital currency of the NBU, the central bank, and the third form of money alongside cash and cashless funds. The peculiarity of the e-hryvnia is that it does not require intermediaries such as banks or financial organizations, as the NBU will be responsible for the digital currency.

The e-hryvnia allows for programmable money, for example, restricting its use for certain purposes or setting a Time limit on its usage. This opens up new opportunities for economic incentives similar to target payment programs.

Ukraine previously tested the e-hryvnia in 2018, when NBU employees made payments and transfers in digital currency. The testing included the issuance of 5443 e-hryvnias and over 300 transactions, including donations and mobile account top-ups.

The NBU's plans for a new stage of e-hryvnia testing at the end of 2024 were postponed to 2025 due to the need to find a technological partner.

'The technological solution must meet the NBU's requirements for the functionality and programmability of the e-hryvnia using smart contracts', the NBU noted.