Online and digital currencies have become some of the most attractive and popular new initiatives in the world of finance. There has been a lot of interest in cryptocurrencies in 2020, with bitcoin rising in price by over 300% on an annual basis last year, and various payment providers announcing that they would begin accepting crypto on their platforms soon. The likes of PayPal and Square have millions of users, and so these decisions are bound to bring cryptocurrencies to many people who may not have used them otherwise. This interest is also driving governments and central banks towards developing their own digital currencies. We could see many such currencies being launched in 2021, and Ukraine is one of those countries looking to get into this space as well.
According to recent news reports, the Ukrainian government has signed a partnership with the Stellar Development Foundation to create a digital asset ecosystem, which would include the framework for a central bank digital currency. This partnership was announced by the Ukrainian Ministry of Digital Transformation, and it sets out the strategy for developing this infrastructure. The plan includes providing support to projects which would specialize in developing digital assets, implementing stablecoin circulation and promoting the creation of a central bank digital currency (CBDC). However, the deputy minister in the ministry said that this partnership does not mean that Stellar will develop the national Ukrainian CBDC; rather, it is expected to allow top-class decision-making and a stable ecosystem to be developed in the digital currency space in the country.
Of course, as we said earlier, digital currencies have grown in popularity over the last year. There are many more areas and places where they can be utilised now, especially online, which has only served to increase their attractiveness for users. One of those places has been in the online casino industry. There have been several online casinos which have begun offering the opportunity for players to use cryptocurrencies to place bets and receive withdrawals at such a BTC online casino. The attractiveness of cryptocurrencies, including the fact that they use blockchain technology, has led to such casinos doing well, since many people want to use crypto for the various benefits that they bring, including reliability, safety and quick transactions. Thus, this is just one factor that will continue to drive interest in cryptocurrencies as time goes on.
The Ukrainian government has been showing a lot of interest in the space of digital currencies, and has been bringing in best practices from the likes of Switzerland, the United Kingdom and the United States, among others, in this space. This could lead to Ukraine being one of the leading countries in Europe for blockchain and digital currency development. The National Bank of Ukraine has been exploring CBDCs since 2017, with the potential impact this could have on monetary policy, financial stability and consumer adoption as well.
Ukraine was given top spot in Chainanalysis’ rankings for global cryptocurrency adoption back in September, where it scored highly for value received and total retail value. At the same time, Stellar’s Lumen (XLM) digital currency is ranked 13th in the world for global market capitalization among cryptocurrencies. Thus, this partnership brings together two leading protagonists in the world of cryptocurrencies, and the fact that Stellar has been asked to develop a crypto and digital currency ecosystem, rather than just work on a CBDC, shows that the Ukrainian government is focusing on the benefits that such a system can bring into the economy. The government is also working towards better and clearer regulation in this space domestically, and this too will help improve the environment around digital currencies in the country as time passes and adoption increases.