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Ukraine Eyes Development Of CBDC As It Teams Up With Stellar Foundation

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Central Bank Digital Currencies [CBDC] has become every country’s dive into digitalization. Ukraine seems to be jumping on the bandwagon as several countries have already begun developing their own digital currencies. Governments have taken advice from prominent crypto platforms in the development of these assets. Ukraine’s Ministry of Digital Transformation recently revealed its partnership with a  prominent cryptocurrency network.

Ukraine To Embrace Digitalization

In a recent blog post, the Stellar Development Foundation [SDF] unveiled that it had signed a Memorandum of Understanding and Cooperation with Ukraine’s Ministry of Digital Transformation. This memorandum is said to focus on the development of digital assets in the country. With China being well ahead in the CBDC game, other countries were also seen catching up. Ukraine seems to be complying with the “better late than never” motto and is prepping to embrace digitalization. The post pointed out that the country wanted to elevate its status in Eastern Europe’s digital financial market.

While it remains uncertain if the country will opt for Stellar’s blockchain for its CBDC, the memorandum affirmed that both the parties would focus on several other aspects of rolling out a digital currency. This included the development process of the virtual asset, all the way to the implementation, circulation as well as the regulation procedures of the asset.

The Deputy Minister of Digital Transformation for IT Development, Oleksandr Bornyakov pointed out that the leading countries of the world were on board with the development of digital assets and Ukraine’s National Bank has reportedly been researching the prospects of CBDC since 2017. He added,

“The Ministry of Digital Transformation is working on creating the legal environment for the development of virtual assets in Ukraine. We believe our cooperation with the Stellar Development Foundation will contribute to development of the virtual asset industry and its integration into the global financial ecosystem.”

All the activities related to the development of Ukraine’s CBDC has started this month. Additionally, the CEO and Executive Director, Stellar Development Foundation, Denelle Dixon revealed that the SDF was rather impressed by the commitment that the country had towards the adoption of innovation and digitalization.

Ukraine, Venezuela Way Ahead Of US In Terms Of Crypto Adoption

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The first cryptocurrency was dropped into the world in 2008. More than a decade later and thousands of cryptocurrencies have been launched so far, the industry has seen a significant increase in both value and popularity. From being associated with the dark web to being widely adopted across the globe, the crypto-verse has come a long way. The rate of adoption and the current value of cryptocurrencies stands as substantial proof. The latest report from Chainalysis further gives a peek into the countries behind the increased adoption rates.

US And UK Far Behind In The Crypto Game

While the world assumes financial leaders like the United States of America or the United Kingdom are open to innovation and encourage digitalization, Chainalysis’s latest report says otherwise. Even though authorities across the globe are realizing the importance of crypto, the adoption rate in several countries is still slow or stagnant. However, beating the US and China to the top, Ukraine, Russia, and Venezuela were the top players in terms of crypto adoption.

Research platform, Chainalysis shared a report titled “The 2020 Global Crypto Adoption Index: Cryptocurrency is a Global Phenomenon.” The report pointed out that Ukraine had the highest rate of adoption. The platform used four metrics to rank a total of 154 countries keeping in mind factors like population and the size of the economy of different countries. The sum of all the metrics further facilitated the ranking of the countries.

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The above table clearly indicates that developing nations were keener on incorporating crypto into their lives. Venezuela has been in the news following its severe economic conditions. The report revealed that the citizens of Venezuela were using crypto more than the country’s native fiat itself. Since Venezuela’s native currency, the Bolivar has been losing its value following inflation. The report further read,

“We also see this pattern in other Latin American countries, as well as Africa, East Asia, and elsewhere. Our data and interviews also suggest that some residents in many developing countries use cryptocurrency to carry out commercial transactions.”

Furthermore, the countries with the lowest rate of crypto adoption included Afghanistan, Algeria, Cape Verde, Chad, Fiji, Laos, Libya, Mongolia, Tajikistan, Turkmenistan, West Bank and Gaza, and Zimbabwe. This list, however, includes countries that are currently under oppression and have limited sources. The web activity in each of these countries was lower than that of the other countries that are ranked higher.