Ukraine taps Stellar to develop digital asset infrastructure, including CBDC framework

The Stellar Development Foundation has signed an agreement with the Ukrainian government to facilitate the creation of a digital asset ecosystem, including a framework for a central bank digital currency, or CBDC. 

Ukraine’s Ministry of Digital Transformation announced Monday that it has entered into a memorandum of understanding with the Stellar Development Foundation. The MOU outlines Ukraine’s strategy for developing digital assets and CBDC infrastructure. This includes providing support to projects specializing in digital assets, implementing and regulating stablecoin circulation, and promoting the development of a CBDC. 

A press release from the Stellar Development Foundation on Monday confirmed that the agreement was signed on Dec. 28. 

Oleksandr Bornyakov, deputy minister of the Ministry of Digital Transformation, told Cointelegraph that facilitating a national cryptocurrency doesn’t mean that Stellar will develop the Ukrainian CBDC. Rather, the Stellar partnership is expected to “enable quality decision-making regarding development of the virtual assets ecosystem in Ukraine.”

When asked about Ukraine’s potential to lead cryptocurrency and blockchain development in Europe and the world, Bornyakov said his ministry is integrating best practices from Switzerland, the United Kingdom, Malta, Liechtenstein and the United States. 

He elaborated:

“Crypto companies, blockchain startups and financial institutions — all of them seek a legally protected environment for conducting business. And the Ministry of Digital Transformation of Ukraine is working on building a legal framework that will offer a transparent and stable regulatory environment for blockchain and crypto companies.”

Bornyakov said that the National Bank of Ukraine has been researching CBDCs since 2017. Ukraine, like many other countries, is exploring the utility of a CBDC, as well as its potential impact on everything from monetary policy and financial stability to consumer adoption.

There have been some rumblings that Ukraine is prepared to lead Eastern Europe’s crypto race, with the Ministry of Digital Transformation pushing for clearer regulations on digital assets.

In September, Chainanalysis gave Ukraine the top spot in its global ranking on cryptocurrency adoption. Ukraine scored especially high on measures of on-chain value received and total on-chain retail value.

Stellar’s Lumen (XLM) is currently ranked 13th in global market capitalization for all cryptocurrencies. The Stellar Foundation’s core principles include creating more equitable access to the global financial system via open-source, peer-to-peer technology.