Survey: Financial Sector Wants Ukraine’s CBDC to Facilitate Transactions in the Crypto Market

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A survey conducted among financial professionals has indicated that the industry wants Ukraine’s future digital currency to be used as a tool in the crypto space. The financial sector also favors a blockchain design for the e-hryvnia that would allow peer-to-peer transfers and fuel e-commerce.

Financial Experts Define Potential Uses of Ukraine’s Digital Currency

The National Bank of Ukraine (NBU) has published the results of a survey aimed to establish the potential demand for a central bank digital currency (CBDC). The regulator sent out a set of 30 questions to 100 financial experts with various backgrounds – financial markets, corporate and retail business, public sector, and crypto business.

The poll also had to identify possible use cases for the e-hryvnia. NBU was among the first central banks to start exploring options to issue its own digital currency. It launched a study back in 2016 and then tested a CBDC in retail payments two years later. “We already have practical experience in implementing a pilot project to issue e-hryvnia in 2018,” the Chairman of the NBU Kyrylo Shevchenko noted, elaborating:

To find the really popular options and niches for the e-hryvnia and to determine the potential effect of its implementation, we decided to hear the opinion of financial market experts and conducted a comprehensive survey.

The representatives of the financial sector were offered to choose between six potential areas where they feel the e-hryvnia can be employed. According to the majority of the respondents, the most promising use case would be in non-cash retail payments, primarily peer-to-peer (P2P) transfers between individuals and e-commerce transactions. Using the CBDC for cross-border payments, again as a P2P instrument, is the second most recommended application.

The other options included ‘targeted social benefits (G2P),’ ‘settlement of securities (B2B),’ ‘corporate payments (B2B),’ and ‘financial instruments.’ 77% of the polled supported the first of these use cases, provided its scope is expanded to include other specific government payments such as dedicated subsidies. The NBU said it’s going to take into account the opinions of the financial professionals.

Ukraine’s Financial Sector Says E-Hryvnia Should Be Used in the Crypto Space

Many of the participants in the survey also supported the use of the electronic hryvnia as a tool for conducting transactions in the field of virtual assets, the NBU emphasized. The financial sector representatives also insisted the CBDC should be a blockchain-based currency.

Given the size of the crypto asset market in the country and the availability of blockchain technologies, Ukraine’s central bank believes the use of its digital currency to facilitate the circulation of virtual assets in the country – for example, in exchange, issuance, and other crypto-related transactions – is worth further research.

Ukraine is considered a leader in cryptocurrency adoption as it was ranked first among over 150 nations in last year’s edition of the Global Crypto Adoption Index by blockchain forensics firm Chainalysis. However, the government in Kyiv is yet to adopt comprehensive regulations for the country’s expanding crypto space. A draft law on “On Virtual Assets,” which was recently updated, should be voted this year.

What’s your opinion about the possible uses of a central bank digital currency? Share your thoughts on the subject in the comments section below.