Ukraine joins forces with Stellar to research CBDC

05 Jan 2021

An agreement has been penned between the Stellar Development Foundation and the government of Ukraine for the creation of a digital asset ecosystem, as well as a central bank digital currency (CBDC) framework.

Ukraine's Ministry of Digital Transformation affirmed it has entered into a memorandum of understanding with the Stellar Development Foundation on Monday, Cointelegraph reports.

The MOU highlights the country’s strategy for developing digital assets and CBDC infrastructure, with the agreement signed at the end of last month.

Deputy minister of the Ministry of Digital Transformation, Oleksandr Bornyakov told Cointelegraph that facilitating a national digital currency does not signify that Stellar will develop the CBDC, but that the partnership will "enable quality decision-making regarding development of the virtual assets ecosystem in Ukraine."

In relation to the Ukraine’s potential of being a leader in crypto and blockchain development, Bornyakov added that his ministry is integrating best practices from Switzerland, the UK, Malta, Liechtenstein and the U.S. 

He added: "Crypto companies, blockchain startups and financial institutions — all of them seek a legally protected environment for conducting business. And the Ministry of Digital Transformation of Ukraine is working on building a legal framework that will offer a transparent and stable regulatory environment for blockchain and crypto companies."

In addition, Bornyakov went on to say that the National Bank of Ukraine has been looking into CBDCs for the past three years.

The country is researching the utility of a CBDC, and the possible impact on factors including monetary policy, financial stability and consumer adoption. 

The Ministry of Digital Transformation is pressing for more transparent regulations on cryptocurrencies, as the Ukraine readies to lead the crypto race in Eastern Europe.