Ukraine’s TASCOMBANK Study Shows Benefits of Stellar Blockchain to Crypto Economy
Despite the humanitarian crisis fueled by the ongoing war against Russia, Ukraine is still open to cryptocurrency and has seen more reasons to be bullish, thanks to the Stellar Blockchain.
The Eastern European nation is one of the countries in the European Union (EU) bloc with an appreciable level of crypto adoption. A new study has shown how the country can tap the Stellar ecosystem to facilitate cash movement.
Utilizing Stellar Blockchain For Cash Transfer
According to a two-year feasibility study on how to use the Stellar technology to transfer money in the war-ravaged country, a new optimism has emerged in the Ukrainian crypto space.
One of the country’s oldest and largest financial institutions, TASCOMBANK, which was the brain behind the study, started the research in 2021 at the request of several Eastern European nation’s central banks and legislators.
This study, which Ukraine’s Ministry of Digital Transformation partly unveiled, observed some use cases against the nation’s traditional finance (TradFi) banking system. Furthermore, the study shows that electronic money transfer via Stellar Blockchain is cost-effective and faster than the traditional system, given the current situation in the country.
It is worth noting that Jed McCaleb, the former Ripple co-founder developed the Stellar blockchain technology after his exit from Ripple Labs. According to the study, the Stellar Blockchain offers improved security and user privacy, cheaper and quicker transactions, and high throughput.
Meanwhile, the technology is more relevant now, given that the country’s central bank has blocked all local commercial banks from implementing new forms of electronic money transfer, especially crypto. In the first few days of Russia’s invasion of Ukraine in February 2022, the Ukrainian banking regulator announced the decision to stop banks from rolling out alternative money transfer methods.
A New Crypto Use Case
The country’s national legislature approved a slew of changes to its regulations around cryptocurrency in 2021, around the same period the TASCOMBANK study began. Meanwhile, the study aims to analyze payments between individuals and enterprises and company payrolls, validating a number of the reforms that the legislature approved at the time.
Commenting on the Stellar study, the Deputy Minister of digital transformation, Oleksandr Bornyakov, noted that the research highlighted several benefits specific to Ukraine and its real-world application for blockchain technology. Bornyakov added that the regulators are also exploring the possibility of introducing more permissions for digital assets used in the future.
Furthermore, the Ukrainian government official disclosed that the pilot test of the Stellar technology would usher in accountability, cost-effectiveness, and transparency in the crypto ecosystem. However, their debate about Stellar’s decentralized status has continued since the network went down for up to two hours in 2019.
Similarly, in 2021, a handful of crypto exchanges halted withdrawals on their platforms after several failed transactions due to a node outage. Meanwhile, despite its perceived shortcomings, the Stellar Blockchain still enjoys significant use in the industry.
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