Central Bank of Ukraine has developed its own version of digital currency

The National Bank of Ukraine, the country’s central bank, has been working on a pilot project to test the usefulness of a digital version of its currency, the Hryvnia. The bank announced today that it had completed the pilot and would be investigating further uses of the token.

While noting that the country is “ahead of world leaders,” the bank’s payment systems director Alexander Yablunivsky clarified that the country has not launched a cryptocurrency. Cryptonaughts will appreciate that he was very cognizant of the fact that a cryptocurrency is not an instrument issued by a central bank. According to a translation of the original news report: We are not talking about cryptocurrency, we are talking about digital currency of the central bank. It can be implemented on both the centralized registry technology and the decentralized one. This is a completely separate issue, which follows from the target model chosen.

As we discussed when JP Morgan allegedly entered the crypto space with its “own coin,” there are properties that either disqualify or qualify a blockchain token as a cryptocurrency. JPM Coin failed all the important tests, and Yablunivsky understands that the Ukrainian national token will as well.

By definition, a bank must have more control over its issued currency than the traditional immutable ledger can offer. Many properties of blockchain are useful in traditional finance, but some are counterintuitive. A crypto must be immutable and censorship-resistant. It must be fungible anywhere. It isn’t subject to identity verification or monetary issuance policies.

Ukraine has been investigating the potential of blockchain technology since 2016. They’ve finally got a working product, but are not yet sure how they will use it. The primary use cases will be peer-to-peer payments and potentially international settlement.

Not a Cryptocurrency: Ukraine Completes National Digital Currency Pilot, CCN, Feb 26