Bank of Ukraine Verifies Electronic Money on Stellar Blockchain

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Demonstration experiment of electronic money issuance

On the 12th, Ukrainian long-established commercial bank TASCOMBANK released a report on a test to issue electronic money on the network of the crypto asset (virtual currency) Stellar (XLM). He says he sees various advantages of using blockchain.

With the support of the country’s Ministry of Digital Transformation, TASCOM has been conducting demonstration experiments since 2021 to verify “the issuance of electronic money on an open blockchain with asset management functions by the issuer.” will report the results.

TASCOM Vice Chairman Sergii Kholod said, “As part of the demonstration experiment, we will investigate how to issue and manage e-money, which can be a next-generation payment method for Ukrainian citizens, organizations, their employees and customers, government agencies, etc. I considered it,” he said.

Going forward, he continued, “it is possible to provide financial services using assets on the blockchain while taking into account meeting regulatory requirements.”

Experiments focused on peer-to-peer (P2P) transactions, commercial payments and payments. The report also aims to share information with the National Bank of Ukraine and the Ministry of Digital Transformation.

Ukraine’s Deputy Minister for Digital Transformation Oleksandr Bornyakov explained the benefits of blockchain:

The pilot has proven the main advantages of blockchain. Among other things, it will make transactions faster and more cost-effective, system transparent, and make access to financial services simpler.

The Ministry of Digital Transformation and TASCOMBANK are considering approaches to further introduce blockchain-based payment methods to the market.

Denelle Dixon, CEO of the Stellar Development Foundation, commented:

Stellar is designed for asset issuance. The findings in this test demonstrate the technology’s potential to provide convenience for businesses, governments and citizens.

We believe that this proof-of-concept will prove that the solution built on Stellar is useful in the real world, and will also serve as a foundation for Ukraine to promote the adoption of cryptocurrencies.

In January 2021, Ukraine’s Ministry of Digital Transformation signed a memorandum of understanding with the Stellar Development Foundation (SDF), which is responsible for the development of Stellar (XLM). The SDF will advise the Ukrainian government on digital currency development and promote the digitization of the country’s currency and assets.

It seems that this demonstration experiment was also conducted under such a partnership.

Relation: Ukrainian government partners with Stella Development Foundation for digital currency related development

Concept of CBDC

Ukraine, which is active in cryptocurrencies, also announced a concept proposal for a central bank digital currency (CBDC) in November last year. A digital version of the fiat hryvnia is meant to complement cash and non-cash forms of the hryvnia and to make all functions of money more efficient.

Relation: Ukrainian central bank publishes CBDC concept plan Also virtual currency related functions

What are CBDCs

A digital currency issued by the central bank of a country or region. It stands for “Central Bank Digital Currency”. The big difference from virtual currency is that CBDC is a legal tender. While it is expected to reduce costs and improve efficiency in currency management and settlement, there are many issues to be considered, such as protection of personal information and privacy, security measures, and impact on the financial system.

Cryptocurrency Glossary