The Ukrainian government has chosen the Stellar blockchain network as the platform to create a central bank digital currency (CBDC).
Announced Monday, Ukraine’s Ministry of Digital Transformation and the Stellar Development Foundation (SDF) signed a memorandum of understanding to create an âecosystem of virtual assets and a national digital currency of Ukraineâ.
The National Bank of Ukraine has been studying the possibility of implementing the CBDC since 2017, and the Stellar partnership will now be the basis for its virtual currency development, according to Deputy Minister of Digital Transformation and IT Oleksandr Bornyakov.
“The Ministry of Digital Transformation is working on creating a legal environment for the development of virtual assets in Ukraine,” Bornyakov said in a statement. “We believe that our cooperation with the Stellar Development Foundation will contribute to the development of the virtual asset industry and its integration into the global financial ecosystem.”
Stellar, the nonprofit and cryptocurrency organization launched in 2014 by Ripple co-founder Jed McCaleb, was selected last month by the German bank Bankhaus von der Heydt (BVDH) as a means of issuing a stable euro coin. German regulator BaFIN has also approved the issuance of tokenized bonds on Stellar.
Stellar Development Foundation CEO Denelle Dixon said the partnership with the Ukrainian government and other stakeholders to digitize the hryvnia will be officially launched this month.
âWe have had conversations with governments and institutions around the world on key considerations for issuing CBDC. It’s important to remember that many, if not all, of these organizations were not designed to be technology companies and that they support many audiences, âDixon said via email. âThis makes a public-private partnership so essential to getting it right. “
The National Bank of Ukraine referred to the use of a “private version of the Stellar blockchainAs part of its E-hryvnia pilot project in 2019.
The Stellar Consensus Mechanism (SCP) gives issuers unique certainties that they wouldn’t have on other public blockchains (like issuer-imposed finality), according to Stellar’s COO Jason Chlipala.
“SCP would serve a central bank well, reflecting the trusting relationship it would maintain and ultimately give it an important vote in the consensus protocol,” Chlipala told CoinDesk via email.
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