- Ukraine government optimistic cryptos has many promising opportunities.
- NBU says increased crypto adoption would end volatility.
- Ukraine government to study CBDC adoption in other countries.
Through the Central Bank, the Ukraine government is on course for a fair crypto regulation in the country. This is as the Ukraine Parliament adopted a major crypto law in early September.
The central bank of Ukraine has expressed optimism in virtual assets and cryptocurrencies in response to a statement by the National Bank of Ukraine.
The apex bank said the NBU recognizes important technological innovations linked to virtual assets and sees “many promising opportunities,” including improving access to financial services and increasing competition in the payments market.
The NBU, in its statement, also said that cryptos like Bitcoin has not seen a significant impact on the Ukrainian monetary policy and financial stability owing to its “relatively limited” adoption level and high price volatility.
However, NBU expressed confidence that increased crypto adoption would eventually make cryptocurrencies less volatile. The bank said it would be taking certain measures to ensure financial stability.
The bank also stated that cryptos ultimately would pose a potential risk of replacing the national currency and the “emergence of parallel money circulation” outside the control of the NBU. Other risks include foreign capital outflows, money laundering concerns, as well as “displacing traditional banking.”
However, it said it would minimize the risks by working to ensure that the Ukrainian hryvnia is the only legal tender in Ukraine, the authority said, adding that the central bank will still be committed to promoting crypto at the same time.
Ukraine government open to CBDC
Lastly, the bank said it would study the international experience of developing a central bank digital currency (CBDC). Back in July, Ukraine President Volodymyr Zelenskyy assented to a law that enabled the NBU to issue a CBDC.
The law mandated the NBU to set up regulatory sandboxes for testing payment services and instruments based on emerging technologies. It also required close collaboration between the Ukrainian central bank and local startups in the payment market.