Key Takeaways:
- The “Red Lines”: NBU governor draws red line for crypto to be used as a means of payment.
- CBDC Development: Ukraine is planning for a pilot launch of e-hryvnia in collaboration with global central banks.
- Regulatory Readiness: Legalization will follow the EU’s MiCA directive, with a focus on de-shadowing the market and empowering regulators.
Table of Contents
The National Bank of Ukraine (NBU) might legalize crypto soon. In a recent interview, Andriy Pyshnyy, the governor of the NBU, hinted at the need to adopt a legal framework for virtual assets guided by the Markets in Crypto Assets (MiCA) directive and European Union regulations. While MiCA came into effect in January 2025, Pyshnyy emphasized that Ukraine will use the flexibility it provides for national-level regulation. Additionally, Pyshnyy stated that bringing the existing market “out of the shadows” would be an “ideal solution” that could positively influence how Ukraine’s financial sector is viewed by its international partners.
The governor further emphasized the need to establish regulatory readiness. Pyshnyy says that regulations need to be in place and regulators need to have power and authority in order to enforce them. According to Pyshnyy, a transition period may be needed to achieve this.
The “Red Lines”: Why the NBU is Banning Crypto Payments
While the NBU is open to recognizing crypto as a tradable asset, Governor Pyshnyy laid out a firm boundary on its use as money.
It is important for us that our ‘red lines’ are strictly observed,”
“Virtual assets cannot be a means of payment, they cannot undermine the effectiveness of our monetary instruments in any way.
The governor stressed that the legalization of virtual assets should not weaken the NBU’s ability to manage price stability. The governor also warned that cryptocurrency should not be used to bypass currency regulations imposed under martial law to protect the country’s foreign currency reserves.
The E-Hryvnia: Ukraine to have its own CBDC
The NBU plans to launch its own Central Bank Digital Currency (CBDC) called the e-hryvnia. Which is essentially a digital form of non-cash hryvnia issued by the central bank. Currently, the NBU is in the process of finding a technology partner and working on preparing a pilot project. The NBU is engaging in discussions with several international institutions, such as the European Central Bank, the Bundesbank, the Bank of France and other major institutions to learn and enhance their CBDC project.
A Critical Juncture for Ukraine’s Crypto Future
NBU’s stance on the entire crypto industry has been made clear by Pyshnyy, who embraces crypto as an asset. However, Pyshnyy sees a clear “red line” if it is used as a medium of payment. The NBU is also currently in the process of launching a pilot project for CBDCs. Moreover, Pyshnyy has mentioned that the NBU will require a “transition period” to ensure the de-shadowing of the crypto market and ensure regulations are in place to protect its financial sovereignty.
Final Thought: Can Ukraine’s asset,” not means of payment”, approach attract investments to crypto? Or will the ban on crypto as a medium of exchange lead to a stifle in Ukraine’s crypto industry? The path Kyiv chooses in the coming months, guided by the EU’s MiCA framework, could set a precedent for other nations navigating the same complex issue.
