New reports reveal that the National Bank of Ukraine is considering launching its own state-backed digital currency. The already named e-hryvnia digital currency would be a centralized stable coin entirely under government control. According to World Coin Index, the motivation behind the coin is to increase the Ukraine’s national rate of payments made without cash, while reducing transaction fees.
State-backed cryptocurrencies have yet to gain traction from any credible federal governments. As of now, the only countries making serious attempts at launching a government-controlled digital coin have been the totalitarian regimes of Venezuela and Iran. In the case of Venezuela, the Petro has served as an unsuccessful last ditch effort to save the country’s crashing economy. Meanwhile, Iran has unveiled plans to launch its own crypto sometime in the next 6 months, which is largely intended as a workaround to US sanctions.
Ukraine’s efforts to launch its own stable coin, however, could represent a positive step forward in legitimizing cryptocurrencies on a federal level. While the e-hryvnia won’t offer the decentralization and anonymity associated with traditional cryptos, Ukranian Bank Association Advisor Alexey Kutsch considers cryptocurrencies to be a valuable means of protecting human rights in the technological age.
“On the one hand, it will protect human rights in terms of property and on the other – significantly reduce the costs and time of transactions, as well as accelerate the turnover of money in the country,” Kutsch stated in a press release. A recent statement published the the Ukranian National Bank announced, “The decision on the appropriateness of the introduction of electronic hryvnia in full will be taken only after a detailed analysis.”
Up until now, Ukraine’s attitude toward cryptocurrency has been generally neutral. The country’s parliament held several meetings earlier this year to discuss the importance of regulating digital currencies, and a bill was recently proposed imposing a 5 percent digital assets crypto tax on individual crypto traders, in addition to an 18 percent tax on all crypto-based profits.
Ukraine now stands as the only country in the region considering launching a state-backed digital currency. Russia had at one point expressed an interest in launching a centrally controlled CryptoRuble. However, the project was later abandoned following market downturns beginning in early 2018.
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