According to an announcement from Ukraine's government, the Stellar blockchain network has been selected to be a platform to build a central bank digital currency (CBDC).
Jan. 4 saw the Ministry of Digital Transformation of Ukraine signed a Memorandum of Understanding with the Stellar Development Foundation (SDF), aiming at building out a "virtual assets ecosystem and national digital currency of Ukraine."
Oleksandr Bornyakov - Digital Transformation and IT Deputy Minister - noted that the National Bank of Ukraine has been conducting researches on the possibility of CBDC implementation since 2017, and the Stellar partnership will currently be the foundation to develop its virtual currency.
When asked about Ukraine's potential to lead cryptocurrency and blockchain development in Europe and the world, Bornyakov said his ministry is integrating best practices from Switzerland, the United Kingdom, Malta, Liechtenstein and the United States.
Founded in 2014 by Ripple co-founder Jed McCaleb, Stellar - the cryptocurrency and non-profit organization - was selected by German bank Bankhaus von der Heydt (BVDH) last month as channels to issue a euro stablecoin. Meanwhile, German regulator BaFIN has approved that tokenized bonds can be issued on Stellar.
Denelle Dixon - the CEO of Stellar Development Foundation - stated that teaming up with Ukraine's government and other stakeholders to digitize the hryvnia will officially launch this month.
"We've been in conversations with governments and institutions all over the world about the key considerations for issuing CBDCs. It's important to remember many, if not all, of these organizations weren't designed to be technology companies and that they have many audiences that they are supporting," Dixon said via an email. "That makes a public-private partnership so essential to getting this right."
Looking back in 2019, the National Bank of Ukraine mentioned that a "private version of the Stellar blockchain" could be used as part of its E-hryvnia Pilot Project.
Jason Chlipala - the COO of Stellar - believed that Stellar's consensus mechanism (SCP) allows issuers to boast unique certainties that they wouldn't have on other public blockchains.
"The Ministry of Digital Transformation is working on creating the legal environment for the development of virtual assets in Ukraine," Bornyakov said in a statement. "We believe our cooperation with the Stellar Development Foundation will contribute to development of the virtual asset industry and its integration into the global financial ecosystem."