- The Ukrainian government can now proceed with its central bank digital currency (CBDC) projects as the National Bank of Ukraine (NBU) has obtained legal permission to develop a digital currency.
- The Payment Services Bill, which was initially passed by the Ukrainian parliament at the end of June, aims to implement open banking, which involves giving third-party applications access and control over consumers’ financial information.
- According to previous reports, the NBU has been considering the creation of a digital currency for a few years, noting the potential of a CBDC to increase public confidence in the central bank and its financial services.
The National Bank of Ukraine (NBU) is now officially authorized to create a digital currency, allowing the Ukrainian government to continue with its central bank digital currency (CBDC) plans. According to a statement released Thursday, Ukrainian President Volodymyr Zelenskyy signed a bill titled On Payment Services, authorizing the country’s central bank to issue a CBDC or digital hryvnia. The new law gives the NBU the power to create regulatory sandboxes to test payment services and instruments based on emerging technologies. According to the statement, the new legislation also requires close coordination between the Ukrainian central bank and local entrepreneurs in the payments sector, taking into account the demand of the private sector.
The Payment Services Bill, which was first passed by the Ukrainian parliament at the end of June, aims to introduce open banking, which is to provide access and control to customers’ financial information through third-party applications. . The bill is expected to stimulate the growth of the country’s fintech by allowing private fintech companies to collaborate with banks and expand their business prospects. The newly signed bill also aims to bring Ukraine’s laws into line with the European Union’s legal framework, which would eventually integrate the country’s payment system with that of the EU, the statement said. The legislation is based on current requirements and incorporates European regulatory standards, such as the Payment Services Directive 2 and the Electronic Money Directive.
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As previously reported, the NBU has been exploring the possibility of creating a digital currency for a few years, citing the potential of a CBDC to boost public confidence in the central bank and its financial services. The bank, on the other hand, remained concerned about associated potential concerns such as its influence on financial stability and potential challenges for the traditional banking system. Ukraine’s Ministry of Digital Transformation partnered with the Stellar Development Foundation earlier this year to establish digital assets and a CBDC infrastructure plan.