NBU Pushes Crypto Legalization With Strict Controls and E-Hryvnia CBDC Plan

The National Bank of Ukraine (NBU) has indicated a willingness to support the legalization of cryptocurrencies, but with clear limitations. NBU Governor Andriy Pyshnyy has stated that virtual assets should not be recognized as a means of payment in the country, calling it a “red line” for the central bank [1]. He emphasized that the use of crypto as legal tender could undermine the effectiveness of monetary instruments and erode the bank’s regulatory oversight [1]. Pyshnyy reiterated that any legal framework for digital assets must align with international standards, including those set by the Financial Action Task Force (FATF) and European Union regulations, to ensure financial integrity and prevent circumvention of currency controls [1].

Despite these restrictions, the NBU is actively exploring the development of a central bank digital currency (CBDC). The bank is currently in the process of designing the e-hryvnia and preparing for a pilot project in collaboration with a technological partner [1]. Pyshnyy highlighted the importance of learning from international CBDC initiatives, particularly the Digital Euro project, and noted that the NBU is engaging with major global central banks, including the European Central Bank, Bundesbank, and Bank of France [1]. The pilot aims to generate sufficient insights to inform the broader implementation of the e-hryvnia, which is viewed as a strategic step in Ukraine’s digital financial transformation [1].

Governor Pyshnyy also emphasized the need for the "de-shadowing" of digital assets, suggesting that a transparent legal framework could enhance Ukraine’s reputation within the international financial community [1]. However, he made it clear that the NBU does not see cryptocurrencies as a substitute for fiat currency or as a tool to bypass existing financial regulations, particularly under the country’s current martial law [1]. The central bank’s cautious approach reflects a broader trend among central banks globally, which are seeking to harness the benefits of digital currencies without compromising financial stability [1].

The NBU’s stance is further supported by a recent legislative proposal from Ukrainian lawmakers, which would allow the central bank to include cryptocurrencies like Bitcoin in its national reserves [1]. This development indicates a growing recognition of crypto’s potential role in the financial system, though the NBU’s official position remains focused on ensuring regulatory compliance and minimizing risks associated with digital asset volatility [1].

As the e-hryvnia pilot moves forward, the NBU will continue to monitor developments in the global crypto and CBDC landscape, seeking to balance innovation with oversight. The bank’s approach suggests a preference for a stable, government-backed digital currency over the decentralized and speculative nature of private cryptocurrencies, aligning with its broader mission to maintain monetary stability and financial security [1].

Source: [1] Ukraine NBU Wants Crypto Legalization, Not as ... (https://cryptonews.com/news/ukraine-nbu-wants-crypto-legalization-not-as-legal-tender/)