Employees of Ukraine’s Ministry of Digital Transformation may become the first in the country to get their salaries in digital currency. The National Bank of Ukraine is developing an electronic version of the Ukrainian hryvnia and the ministry is considering the option of using the state-issued coin for remuneration.
Government Employees to Be Paid With Digital Hryvnia
The Digital Ministry is planning to compensate its employees with Ukraine’s central bank digital currency (CBDC), once the new hryvnia is ready for testing. In a recent interview with online news portal TSN, Minister Mykhailo Fedorov revealed this is among the department’s first initiatives for the digitalized national fiat, stating:
We have it on the table as one of the first pilots, the payment of salaries to employees of the Ministry of Digital Transformation in electronic hryvnia.
Fedorov pointed out that “Ukrainians rank first in the world in terms of adaptability to virtual assets.” This openness to technology can be one of Ukraine’s main advantages, he noted, which can attract additional investments to the country and its businesses.
Source: Mykhailo Fedorov, Facebook.
Ukraine was ranked first among over 150 nations in last year’s edition of the Global Crypto Adoption Index by blockchain forensics firm Chainalysis. The government in Kyiv is yet to introduce comprehensive regulations for the country’s expanding crypto space and issue its own digital currency. A draft law “On Virtual Assets,” which was recently revised, is expected to be adopted by the end of the year.
Ukraine’s Coin May Be Used for Subsidies and Social Payments
Another project to pilot the implementation of the digital hryvnia is to use it in the payment of social benefits and government subsidies. However, Mykhailo Fedorov believes authorities need to test the technology first, in order to gather user experience data and understand how it all works before applying the CBDC in the social sphere. The official emphasized:
We are studying the experience of other countries that have launched pilots or are trying to introduce similar electronic currencies.
Fedorov, who also serves as Ukraine’s First Deputy Prime Minister, further elaborated that the central bank digital currency comes with the option to employ smart contracts that can potentially limit the misuse of government grants, Forklog reported. All this will depend on the technical implementation of the digital hryvnia, he noted.
In a separate interview with financial news portal Minfin, Fedorov’s deputy, Oleksandr Bornyakov, revealed that besides moving forward with the digital hryvnia project, Ukraine is preparing to legalize cryptocurrencies. In July, a survey among representatives of the country’s financial sector indicated that the industry would like the future CBDC to be based on blockchain and used to facilitate transactions in the crypto space.
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