- As Ukraine continues to face massive humanitarian aid needs, it is still progressing with its CBDC development, as revealed by Stellar Lumens CEO Denelle Dixon.
- Despite the harmful activities surrounding the digital asset ecosystem, most countries are still working on building and issuing their fiat-pegged CBDC.
Stellar Lumens will play a critical role in developing central bank digital currencies (CBDCs) in the coming months. War-torn Ukraine is building its CBDC amid the ongoing conflict with its closest neighbor, Russia. As Ukraine continues to face massive humanitarian aid needs, it is still progressing with its CBDC development, as revealed by Stellar Lumens CEO Denelle Dixon.
According to Dixon, CBDC is one project the company is keen to work with Ukraine to build. She added that as the war continues, the plan is not moving as consistently as it was before due to the bombings of critical infrastructure and humanitarian disasters in the country. However, Dixon noted that she has yet to determine when they will complete the project or give a definite timeline for its conclusion.
Ukraine Push for CBDCs
The Lumens boss also noted that the Ukrainian president wants to switch to a cashless society as soon as possible. Dixon further revealed that the country has been using other crypto assets and that Stellar was not keen on the government adopting its XLM token. But the focus is on the Ukrainian CBDC, which is intended to strengthen Hryvnia, the nation’s fiat currency.
The government wants to avoid a situation where another crypto token will undermine the usability of Hryvnia. In addition, as the war-ravaged country continues to pursue its national digital currency initiative through the Stellar Lumens ecosystem, the platform might become the base for other CBDC projects to be hosted. The Stellar Lumens network is designed with CBDC development in mind, but that aspect has taken a back seat due to stiff competition.
Lumens is best suited to CBDCs due to its trust system, which is highly sought-after by asset issuers. With Stellar’s native token, XLM, increasingly integrated into the payment system by institutional players, the platform can be a base for further CBDC development.
Central Banks Ready To Issue CBDC
Despite the downturn affecting the digital asset ecosystem, most countries are still working on building and issuing their fiat-pegged CBDC. A recent document released by the Official Monetary and Financial Institutions Forum (OMFIF) revealed that governments are not deterred by the current turmoil in the digital asset landscape and have even ramped up their efforts.
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Accordingly, two-thirds of the surveyed central banks disclosed that they are ready to launch their CBDCs within ten years. Furthermore, a survey of 18 central banks shows that 35% are open to issuing CBDC despite the bear trend in the crypto market. According to the Atlantic Council, about 105 countries are exploring CBDC, representing 95% of the global GDP from 35 countries in May 2020.
With countries like Nigeria, the Bahamas, Jamaica, and others already issuing their CBDC, China is one of the nations running the last phase of tests to launch its national digital currency.