By Hidayat Sultanli
On Jan 05, 2021
The Ukrainian government has chosen the Stellar (XLM) blockchain network as a platform to create a central bank digital currency (CBDC).
On Monday, the Ukrainian Ministry of Digital Transformation and the Stellar Development Foundation (SDF) signed an agreement. The basis of the agreement was the creation of a “virtual assets ecosystem and national digital currency of Ukraine.” According to the Memorandum of Understanding, the Ukrainian government will prefer the Stellar blockchain network for a central bank digital currency it will soon create. Under the agreement, this partnership also aims to solidify Ukraine’s position as an innovative digital country in the Eastern European financial market.
The announcement of the previously signed (December 28) Memorandum was made on January 4. Another major purpose of this partnership is to facilitate the implementation and regulation of stablecoins in Ukraine.
According to Oleksandr Bornyakov, deputy minister of the Ministry of Digital Transformation, The National Bank of Ukraine has been exploring the possibility of implementing CBDC since 2017. The Stellar partnership will now actualize this possibility as the basis for cryptocurrency development. Bornyakov said the followings in a statement he made:
“The Ministry of Digital Transformation is working on creating the legal environment for the development of virtual assets in Ukraine. We believe our cooperation with the Stellar Development Foundation will contribute to the development of the virtual asset industry and its integration into the global financial ecosystem.”
Stellar‘s cryptocurrency XLM immediately boomed after this news. It rose from a daily low of $ 0.12 to around $ 0.16. According to CoinMarketCap data, the cryptocurrency has increased by 13% in the last 24 hours. At the time of writing, XLM is trading around $ 0.160.
Launched by Ripple co-founder Jed McCaleb in 2014, the cryptocurrency and nonprofit Stellar was chosen last month as a euro stablecoin issuing tool by German bank Bankhaus von der Heydt (BVDH). German regulator BaFIN also approved the issuance of tokenized bonds on the Stellar network. Digitization of Ukraine’s official currency, Ukrainian hryvnia, will officially begin this month.
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