SIBOS provided an excellent opportunity to meet colleagues and collaborate. SWIFT again delivered excellence by organizing and supporting this international convention.
One of the topics debated on SIBOS was CBDC (Central Bank Digital Currency). Blockchain opened a lot of possibilities to change banknotes and coins for electronic money, which is in fact an electronic substitution for banknotes and coins. CBDCs might add more options for the central banks to manage money supply in a straightforward way.
Challenges and opportunities of CBDC in Ukraine were discussed by Yuri Vlasenko, UkrSWIFT and Andrew Podderiogin and Volodymyr Nagorniuk from the National Bank of Ukraine.
NBU is exploring the CBDC as many other central banks nowadays in the world do.
Scalability is still the issue for blockchain based CBDCs. However, decentralized general ledger offers reliability and has its advantages over centralized databases.
CBDC offer direct influence of the central bank on the money supply, and the cost of electronic money circulation is substantially less than servicing turnover of physical paper and coins.
To choose specific form of CBDC there are decisions to be made. Should the central bank take centralized or decentralized approach for electronic money issuance? If decentralized approach is chosen, then what type of consensus there should be and what type of electronic money creation and destruction should be taken.
As Ukrainian experience shows, over-reliance on electricity might be problematic in today war circumstances in Ukraine. That is why hybrid country monetary systems, where cash in the form of banknotes and coins coexist with electronic money in the form of CBDC are looking promising.
SWIFT is doing a lot of research and development to provide interoperability solutions for CBDCs as there are a lot of fragmented approaches in the world. International standardization, which will provide more straightforward approach for interoperability of national monetary systems is more important than ever.
We hope that discussions on SIBOS will open the way for rapid development and implementation CBDC in Ukraine under NBU supervision to solve problems Ukrainians facing today.