National Bank of Ukraine Will Be Able to Issue Digital Hryvnia

Ukrainian President Volodymyr Zelenskyy signed the Bill on Payment Services, officially allowing the country’s National Bank to issue digital hryvnia (CBDC).

As reported on the website of the head of the state, the new law makes it possible to speed up the integration of Ukrainian legislation in the economic sphere with the legal system of the European Union.

Among other things, the bill also takes into account the European norms of the Second Payment Directive (PSD2) and the Electronic Money Directive (EMD).

This innovation will further ensure the transparency of banking services at the international level. In particular, it sets requirements for risk management and user authentication.

According to the bill, the electronic money institutions, branches of foreign payment institutions, service providers for providing information on accounts and other payment institutions will appear in Ukraine.

There will be nine payment services, among which two are non-financial (a service to initiate a payment transaction and a service to provide the information on the accounts).

Non-bank financial institutions will be able to open payment accounts, issue payment cards and electronic money. In addition, they will not be required to be the members of payment systems to make a transfer.

But the most striking innovation, according to the signed law, is that the National Bank of Ukraine will now be able to issue its own digital currency and create a platform for testing services, technologies and instruments in the payment market based on innovative technologies.

Also, the bill creates conditions for introducing the concept of open banking in Ukraine, which should start working in the country in 2023. In addition, the liability for illegal actions with the payment instruments and means of access to bank and/or payment accounts, as well as the requirements for the security of payment transactions, will increase – payment service providers will need to use enhanced user authentication in certain cases.

This bill comes into force the day after its publication and comes into effect 12 months later, except for certain articles.

Earlier, the co-founder of the Ukrainian bank Monobank, Oleg Gorokhovsky, said that the institution had completed its integration with a crypto exchange in order to provide an opportunity for the bank users to buy and sell Bitcoins using a debit card.

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