Ukraine’s Ministry of Digital Transformation and Stellar sign memorandum of understanding on cooperation in virtual assets

On December 28, Ukraine’s Ministry of Digital Transformation and the Stellar Development Foundation (SDF) signed a memorandum of understanding and cooperation. Together they will develop a strategy regarding virtual assets in Ukraine.

The document outlines the partnership as follows:

• cooperation in developing the virtual assets market in Ukraine;
• support for projects related to virtual assets;
• implementation and regulation of the use of stablecoins in Ukraine;
• assistance in developing the central bank digital currency of Ukraine.

The last item drew bewilderment in the local community after incorrect headlines in some media suggesting that the Ministry of Digital Transformation had chosen Stellar as the platform to build a central bank digital currency (CBDC).

The community stressed that CBDC issuance is the exclusive prerogative of the National Bank (NBU), and that a contractor should be chosen through a public tender.

https://t.co/VVe86fAuWb NBU is the only entity, which is able to issue the national currency UAH in any form: cash of digital

— Sergey | Everstake (@sergattic) January 5, 2021

For the pilot e-hryvnia project, the NBU did use a private version of Stellar several years ago but concluded that the platform is not suitable for issuing a CBDC.

The official report of @NBUkraine_eng https://t.co/q4gMRSMMal (page 33) is telling Stellar can NOT be used due to its limitation pic.twitter.com/HDdKF3yVUC

— Sergey | Everstake (@sergattic) January 5, 2021

The community also noted a rise in the price of the XLM token after Western media announcements, which may have stemmed from misinterpretation of the memo’s CBDC section.

XLM/USD. Data: TradingView.

In ForkLog’s interview, Deputy Minister Oleksandr Bornyakov said:

«All information about our cooperation with the Stellar Development Foundation is set out in the official releases of both sides. Information that goes beyond the releases and is not confirmed by our representatives is merely speculation. The information presented in CoinDesk does not reflect reality. We have already sent CoinDesk an official letter asking them not to go beyond the releases in their articles».

The Ministry of Digital Transformation’s role in CBDC development is limited to expert advice in working groups and work on projects related to the implementation of a digital currency. In Bornyakov’s view, the expertise of SDF specialists will be useful in achieving the stated goals.

As reported in November, the NBU initiated the bill “On Payment Services,” containing the definition of CBDC and enshrining the NBU’s right to issue them.

Testing results of the e-hryvnia were presented by the regulator in mid-2019, and the MVP with Distributed Lab in February 2020.

An alternative digital hryvnia project was developed by Kuna. We analysed their differences in a dedicated piece.

E-hryvnia vs. cryptogrivna: will the two Ukrainian digital coins clash?

Subscribe to ForkLog news on Telegram: ForkLog Feed — all the news, ForkLog — the most important news and polls.