State-backed Cryptocurrency by Ukraine-Ukraine is home to a Bitcoin revolution of sorts. An augmented reality-based statue of Satoshi Nakamoto can be seen where Lenin’s statue once stood in Kiev. While not a physical monument, it illustrates the affinity residents have developed to cryptocurrencies. There are already more than 20 crypto coins, with an average of about $1.8 million worth of trading happening every day.

National bank Of Ukraine

Ukraine is now in a position to soon launch a new cryptocurrency of its own to the market. The National Bank of Ukraine (NBU) is planning a centralized and government-backed cryptocurrency built by using blockchain technology. The virtual currency is going to represent the state fiat currency: Hryvnia. The new cryptocurrency would be called as e-Hryvnia.

 State-backed Cryptocurrency by Ukraine-One of the main intentions behind this initiative is to reduce the usage of cash in the market and lead to a cashless society. Ukraine is one of the states with the highest levels of inflation in the world at present. The local currency Hryvnia collapsed to a record low against the dollar since the international conflict Ukraine experienced in 2013 and it is continuing to perform poorly ever since. In addition, the country is experiencing some issues with cash; several hackers have attacked banks and their servers causing ATMs to go offline and slowing down certain payment options. The Ukrainian banking system is dominated by different banks from Russia, the European Union (EU) and Ukraine.

The e-Hryvnia appears to be a very good solution to avoid problems with payment transparency and safety, and would clearly increase security and transparency at the time of processing payments.

Furthermore, producing banknotes and coins is a costly process that could be enhanced by using a cryptocurrency. With this new solution, citizens will be able to pay at a store or supermarket using their mobile phones.

Taxes On Cryptocurrency

Ukraine is planning to impose taxes on cryptocurrencies and crypto-related investments. Users will have to pay 5% of all their earnings in cryptocurrencies until December 31st, 2024. After this date, the tax rate will be increased to 18%.

 State-backed Cryptocurrency by Ukraine-There are several countries that are analyzing the possibility of issuing a local cryptocurrency. Other countries such as Norway, the United Kingdom, Sweden, and Canada have also been evaluating the possibility to adopt a central bank digital currency (CBDC). Ukraine is thinking along the same lines about the possibility of a state-owned cryptocurrency.

As long as cash usage declines in countries, a state-backed digital currency could be a good alternative to ensure confidence in money and the monetary system as a whole.

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