The Central Bank of Ukraine is now officially authorized to issue digital currencies

The Ukrainian authorities continues to work on its plans for a central financial institution digital forex (CBDC) because the National Bank of Ukraine (NBU) is now officially authorized to issue digital currencies.

Ukrainian President Volodymyr Zelensky signed a regulation on Thursday entitled “On Payment Services,” which officially permits the nation’s central financial institution to issue CBDCs, a digital hryvnia.

The new regulation permits the NBU to arrange regulatory sandboxes for testing providers and fee devices based mostly on new applied sciences. The new regulation additionally requires shut cooperation between the Ukrainian central financial institution and native start-ups within the funds market, taking into consideration the wants of the private sector, the announcement mentioned.

The Law “On Payment Services”, initially handed by the Ukrainian Parliament on the finish of June, goals to allow the implementation of open banking, the apply of accessing and controlling shoppers’ monetary data via third-party purposes. This regulation is anticipated to increase monetary expertise improvement within the nation and permit private fintech firms to associate with banks and develop extra enterprise alternatives.

The newly signed regulation is meant, amongst different issues, to align Ukrainian regulation with the authorized framework of the European Union, which can in the end allow the nation’s fee system to be built-in into the EU fee system. The laws is based mostly on fashionable necessities and takes into consideration the requirements of European regulatory legal guidelines, together with the Payment Services Directive 2 and the Cryptocurrency Directive.

Related: The Ukrainian e-bank plans to supply Bitcoin trading in July

As beforehand reported, lately the NBU has dealt intensively with the issue of a digital forex and has proven the potential of CBDCs to strengthen public confidence in central banks and their monetary providers. However, the financial institution stays primarily involved concerning the potential dangers related to it, such because the affect of CBDCs on monetary stability and attainable threats to the standard banking system.

Earlier this 12 months, the Ukrainian Ministry of Digital Transformation teamed up with the Stellar Development Fund to collectively develop a method for digital property and the CBDC infrastructure.