Ukraine has announced an agreement with the Stellar Development Foundation to create a national cryptocurrency

Denelle Dixon (Photo courtesy Stellar Development Foundation. All rights reserved)
Denelle Dixon (Photo courtesy Stellar Development Foundation. All rights reserved)

Ukraine’s Ministry of Digital Transformation and the Stellar Development Foundation (SDF) have announced an agreement to work together on the development of a digital currency that will be issued by the national central bank. Undersecretary Oleksandr Bornyakov stated that he believes this collaboration will contribute to the development of the virtual asset industry and its integration into the global finance ecosystem. SDF developed Stellar, a free / open source and decentralized protocol for transfers between cryptocurrency and common (fiat) currency. Lumen (XLM) is a cryptocurrency created using this protocol, and its value has grown significantly since this announcement.

The Stellar protocol was implemented in 2014 by Jed McCaleb together with Joyce Kim. Other partners were subsequently involved in the creation of SDF, a non-profit organization that over the years has developed a series of projects for the application of the Stellar protocol.

The Stellar protocol’s code is available under the Apache 2.0 license, a very permissive free / open source license. This means that anyone can take it, use it, and modify it at will. However, the Ukrainian project is ambitious as official statements indicate that the National Bank of Ukraine has been researching the possibility of creating a digital currency since 2017. A collaboration with experts of this sector is critical to the success of a project of this type, and SDF has been working in the sector for years.

Denelle Dixon, who’s been SDF’s CEO since May 2019, has called digital assets and national digital currencies among the most important innovations of her life. She also stated that Ukraine has demonstrated its commitment to developing an environment of innovation for the digital economy.

The new collaboration also aims to regulate the circulation of the so-called stablecoins in Ukraine. These are cryptocurrencies created with the aim of minimizing changes in their value. This is a sensitive issue also because Facebook is working on the creation of a cryptocurrency of this type that would be global.

The announcement is not directly about SDF’s Lumen cryptocurrency, but after the deal was made public there was a remarkable increase in its value. There was also speculation this (Italian) morning that led to a peak that, however, didn’t last long.

This type of initiative by a government and a national bank shows how blockchain, the technology behind cryptocurrencies, is spreading even in traditional financial environments alongside common currencies (in jargon called fiat). Less than a month ago, Bankhaus von der Heydt (BVDH), one of the oldest European banks, launched the Euro Stablecoin (EURB), again on the Stellar network. On both sides there are people who continue to want to maintain the separation between traditional (fiat) currencies and cryptocurrencies, often for completely different reasons, but at the moment it seems that the boundaries between these two worlds are becoming more blurred.

Lumen's tends in the last week seen on Coinbase
Lumen’s tends in the last week seen on Coinbase

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