Ukraine becomes CIS’s Bitcoin & Blockchain leader

News and Analysis

Bitcoin and blockchain have recently become the most discussed issue in Ukrainan fintech sector. As government institutions gradually become loyal to cryptotechnologies, local community becomes more active, and more and more merchants at least consider accepting bitcoin, even if they have not started accepting it yet.

Even today, when in Kyiv, you may go to groceries and pay with bitcoins, use bitcoins for a movie ticket, ride a cab for bitcoins, and so on. In Odessa, one may pay to a real estate agency, but some stuff or office stationery from a local show rooms all for bitcoins. Our readers might recall a recent flash mob #takemybitcoin spreading the news of bitcoin among restaurant owners. Buying bitcoin for cash is not a problem in Ukraine; it is available both via localbitcoins-like services and thousands of iBox terminals.

Ukrainian Bitcoin Evangelism

Local Bitcoin Foundation (BFU) has played a major role in promotion of cryptotechnologies in Ukraine. The foundations members actively interacted with banking organizations and the National Bank of Ukraine for the purpose of integration of blockchain and bitcoin into the countrys economy. BFU acts mostly as a consulting entity and knowledge base for financing institutions interested in modern technology.

Active advocacy deployed by Ukrainian bitcoin enthusiasts resulted in propagation of bitcoin in Ukraine shortly after. NBUs representatives attended Bitcoin Conference Kiev in September, and Natalia Lapko, head of NBUs payment system department, spoke of blockchains / bitcoins potential positively and constructively during her speech. National Bank of Ukraine also published an official letter clarifying the regulators official stance towards digital currencies.

NBU made it clear that it had no intentions to interfere in cryptocurrency sector, and would follow the example of EU regulators. One year earlier NBU had a more negative attitude when it came to bitcoin. This change of heart may be caused by better understanding of the issues technological level. Earlier this year, BFU has prepared a white paper named Bitcoin as a Tool for Ukraines Fintech Development for the NBU. The paper disclosed some technological features of bitcoin and blockchain technology, and also provides a digital currency analysis findings prepared by the worlds leading financial structures.

Focus of Ukrainian bitcoin sectors general interest has moved from cryptocurrency as a speculative asset to blockchain as a technology beyond finance. New local Ponzi schemes have emerged in disguise of cryptocurrencies, but they are not worth a serious discussion.

High Hopes for Blockchain

An e-government agenda memorandum was signed in Kiev by the Electronic Government Programs management and Bitcoin Foundation Ukraine on September 29, 2015. The working group has to solve an issue of decentralized data storage; the highest priority for the developers is establishment of a human-factor-proof database which prevents unauthorized editing by counterparts. BFU acts as a technological partner and a consulting party.

However, this autumn saw another event important for development and propagation of blockchain in Ukraine. American technology company Innovecs in cooperation with KUNA Bitcoin Agencys CEO Mikhail Chobanian launched a competence center Blockchain, which in fact is a lab on research and integration of blockchain technology. Blockchains R&D department will engage in connecting Ukrainian banks to Ripple protocol in the near future.

The issue of structural changes and reforms in state and local governance became a burning question in Ukraine. The demand for transparent bids and elections, simplification of bureaucratic procedures and decrease in numbers of state officials, as well as corruption fighting only grows. Blockchain could become the key technological solution for most problems Ukraine has to face nowadays.

Toly Kaplan exclusively for ForkLog

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