TASCOMBANK has published its findings on the advantages of using blockchain technology to issue a national digital currency. Pilot for the e-hryvnia was conducted by the bank in collaboration with Stellar Foundation and global fintech Bitt, under the supervision of the National Bank of Ukraine, the Ministry of Digital Transformation.
On January 12, TASCOMBANK, one of Ukraine’s oldest commercial banks, released its findings on the advantages of issuing electronic money on a blockchain. The pilot program which began in December 2021, saw the bank launch e-hryvnia, Ukraine’s national digital currency, on the Stellar (XLM) network. TASCOMBANK was testing electronic hryvnia in a payroll for employees at IT solutions company Diia, and for peer-to-peer and merchant payments.
The report submitted to the Ministry of Digital Transformation and the National Bank of Ukraine pointed out the various advantages of decentralised ledger technology (DLT), like greater transparency and accountability “at all stages of circulation and among all participants”, improved security and confidentiality of client data, low transaction costs, instant payments functionality, and high transaction throughput on a blockchain-based platform.
The initiative which was implemented under direct supervision of the Ukrainian government and the Stellar Development Foundation – a non-profit that oversees development of the Stellar blockchain – will serve as the “technological basis” for the issuance of a digital currency and the next step towards innovating the country’s payments and financial infrastructure. TASCOMBANK partnered with Bitt to build and test the e-hryvnia on Stellar, and deploy the token on the global fintech’s Digital Currency Management System (DCMS) – which comprises of a transaction network, a secure token minting system, and a digital currency operations manager.
The e-hryvnia project is part of a collaboration between the Ministry of Digital Transformation of Ukraine and the Stellar Foundation announced back in January 2021, which is aimed at the “exploration and experimentation” of blockchain-powered digital financial assets. Since the conflict with Russia began, several regulatory reforms were made for crypto assets in the country which introduced improved models and use of existing bank account structure for payments.
Stellar is a proof-of-stake (PoS) blockchain protocol that is designed to act as a financial infrastructure to facilitate cross-border transactions in digital currencies as well as a platform to issue other cryptocurrencies.
In December, Stellar announced that it was working with the United Nations to launch a blockchain-based payments system that will deliver cash assistance to war refugees in Ukraine. The UN High Commissioner for Refugees (UNHCR) – a body that distributes monetary aid to refugees in war-inflicted countries – and Stellar Aid Assist – a service that allows users to deliver aid in crypto on the Stellar network – will oversee the project that will be tested in Kyiv, Lviv and Vinnytsia and later expanded to other parts of the country.
Ukrainians were required to download Stellar’s non-custodial wallet ‘Vibrant’ on their smartphones, and then the United Nations would send funds in USDC stablecoins into their wallet addresses. The funds will help refugees cover basic necessities like rent of accommodation, food, medical care and heating during winter. Those who choose to cash out the tokens can do so by converting the funds to hryvnia, euro or dollars at MoneyGram exchanges across the country.
At the time of writing, XLM is trading at $0.082 – up by 2.7% in the last 24-hours. Despite the positive outlook for the project, the XLM token is priced over 90% below its all-time high of $0.87 which it reached over five years ago.