TL; Distribution DR
- The optimistic Ukrainian government cryptos offer many promising opportunities.
- NBU says increased crypto adoption would end volatility.
- The Ukrainian government will explore the adoption of CBDCs in other countries.
Through the Central Bank, the Ukrainian government is on the right track for a fair regulation of crypto in the country. It was then that the Ukrainian parliament passed a major cryptography law in early September.
Ukraine’s central bank expressed optimism about virtual assets and cryptocurrencies in response to a statement from the National Bank of Ukraine.
Apex Bank said the NBU recognizes important technological innovations related to virtual assets and sees “many promising opportunities,” including improving access to financial services and increasing competition in the payments market.
The NBU, in its declaration, also said that cryptos like Bitcoin have not had a significant impact on Ukraine’s monetary policy and financial stability due to its “relatively limited” level of adoption and high price volatility.
However, NBU said it was convinced that increased adoption of crypto would eventually make cryptocurrencies less volatile. The bank said it would take certain steps to ensure financial stability.
The bank also said that cryptos would eventually present a potential risk of replacing the national currency and “the emergence of parallel monetary circulation” beyond the control of the NBU. Other risks include foreign capital outflows, money laundering problems, as well as the “displacement of traditional banking services”.
However, he said he would minimize the risks by ensuring that the Ukrainian hryvnia is the only legal tender in Ukraine, the authority said, adding that the central bank will still be committed to promoting crypto at the same time.
Ukrainian government open to CBDC
Finally, the bank said it will study the international experience of developing a central bank digital currency (CBDC). Last July, Ukrainian President Volodymyr Zelenskyy approved a law allowing the NBU to issue a CBDC.
The law mandated the NBU to set up regulatory sandboxes to test payment services and instruments based on emerging technologies. It also required close collaboration between the Ukrainian central bank and local startups in the payments market.