TASCOMBANK Hryvnia-nominated Electronic Money Pilot Report Recommends Adoption of Blockchain to Transform the Payment Landscape of Ukraine
Detailed report outlines advantages of issuing and distributing electronic money on blockchain, including transparency, accountability, security, low transaction costs, and high throughput.
Kyiv, Ukraine, January 12, 2023 — Today, TASCOMBANK, one of Ukraine's oldest commercial banks, released the findings of its electronic money pilot on the Stellar network. The report provides information to the National Bank of Ukraine and the Ministry of Digital Transformation of Ukraine on the advantages of issuing electronic money on blockchain. The report highlights the advantages of issuing on blockchain – which include greater transparency and accountability at all stages of circulation and among all the participants in transactions, improved security and confidentiality of client data, low transaction costs, instant payments functionality, and high throughput of the blockchain platform – at each stage of development, from conducting operations to testing.
The objective of the pilot, which started in 2021, was to test the issuance of electronic money on an open blockchain with asset-control capabilities for issuers. It focused on peer-to-peer and merchant payments, as well as payroll.
Sergii Kholod, the First Deputy Chairman of the Board of TASCOMBANK, said, “As part of a pilot project we explored a new way of issuing and managing electronic money which could be a new generation means of payment for the citizens and organizations of Ukraine, their employees and clients, government institutions, and international organizations. The results of the pilot project presented the openness of the bank's infrastructure to blockchain solutions in the future. JSC TASCOMBANK could provide an appropriate level of financial services using blockchain assets, taking into account all regulatory requirements.”
The basis for launching the pilot in 2021 was the Ukrainian legislation on electronic money. Regulatory changes introduced in 2022 due to the war in Ukraine led to an improved model and use of the existing bank account structure.
Oleksii Shaban, Deputy Governor of the National Bank of Ukraine, commented, “There are still many hypotheses to study and test within the framework of pilots. But the pilot results are important material for the analysis and use in the work of commercial and Central banks specialists. We congratulate the desire of TASCOMBANK for innovation and allocation during the war of a resource for research that may become the basis for the further development of the payment landscape of Ukraine.”
“The results of the Pilot proved the key advantages of blockchain”, said Oleksandr Bornyakov, the Deputy Minister of Digital Transformation of Ukraine. “In particular, fast processing and cost-effectiveness of transactions, accountability and transparency of the system, and also simplified access to financial services. The Ministry of Digital Transformation and TASCOMBANK are considering the approaches to the further market introduction of the blockchain-based payment instruments.”
Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation, said, “Stellar is designed for asset issuance. The findings of this pilot show the potential utility of the technology for businesses, governments, and citizens. It confirms that with an open source technology, innovators like TASCOMBANK, with the support of the MDT, can configure virtual assets that are secure, interoperable, and meet regulatory standards. We believe this pilot proves the real world solutions built on Stellar and sets the foundation for greater adoption of virtual assets in Ukraine.”
The pilot was launched in December 2021 with support of the Ministry of Digital Transformation. It follows an initial partnership announced in January 2021 on the exploration and experimentation of virtual assets between the Ministry of Digital Transformation and the Stellar Development Foundation.
About TASCOMBANK TASCOMBANK is one of the top Ukrainian commercial banks, considered as a systemic bank, founded in 1989. It operates in many fields of banking activities such as consumer and corporate lending, factoring, electronic commerce, acquiring, trade operations financing etc..
About Stellar Stellar is a decentralized, fast, scalable, and uniquely sustainable network for financial products and services. It is both a cross-currency transaction system and a platform for digital asset issuance, designed to connect the world’s financial infrastructure. Financial institutions worldwide issue assets and settle payments on the Stellar network, which has grown to over 7 million accounts. For more information, visit stellar.org.