Every day we are getting one step closer to the prospect, when every financial action – from buying bread to transferring funds to volunteers, can be under the full control of the state. Digital currency is able to transform the monetary system into a transparent surveillance mechanism, where any transaction is stored, analyzed and, if necessary, instantly blocked. This is no longer an assumption or a futuristic scenario, but the direction in which Ukraine is moving under the slogan of supposedly technological development. And while public representatives of the authorities condemn digital currency in other countries, while talking about innovation, transparency and its convenience, in reality we are facing a rather dangerous line between digital progress and digital slavery.
How the digital hryvnia can change the relationship between the state and the citizen
For more than a year now, the Deputy Prime Minister for Digital Transformation, Mykhailo Fedorov, has been systematically promoting the idea of introducing a digital hryvnia in Ukraine in the form that contains signs of centralized control. Back in August 2021, he publicly announced plans to pay salaries to his team in e-hryvnias by the end of the same year. On February 21, 2022, just a few days before the full-scale invasion, a new promise was made to launch a digital hryvnia by the end of 2022. In February 2023, Fedorov again announced plans to launch the e-hryvnia, this time in 2024. After all, it was on his initiative that the National Bank of Ukraine determined 2025 as the time for the pilot launch of the digital currency test project.
As you can see, the term “digital hryvnia” has long ceased to be a technical exotic. Today, this is a real element of the state strategy, which the National Bank of Ukraine is preparing for testing in the coming years. It is about the third form of national currency, which should function alongside cash and the usual non-cash funds. But what appears to be another technological step actually has much deeper and potentially controversial implications, especially when it comes to controlling citizens’ money.
According to the official position, the digital hryvnia will not just be electronic money, its main “innovation” is software. That is, unlike a regular bank account, it will be possible to limit the use of such money. For example, if the state provides financial assistance for housing reconstruction, these funds can be spent exclusively on building materials. If it is money from the reading support program, then it will be allowed to buy only books.
Deputy Chairman of the NBU Oleksiy Shaban explains, that now banks are forced to open separate accounts or issue special cards for targeted payments. A digital currency is supposed to simplify this process. Everything will be decided “in the admin”: labels will be assigned to certain products in the store system, and the digital hryvnia will be able to read these restrictions. It will be simply impossible to buy something outside the established list, for example, sweets or alcohol, with such a hryvnia. After receiving this money in the seller’s account, the restrictions will be removed, and he will be able to dispose of it as a regular currency. This is what the technical side looks like. But this is where deeper questions about the principles of financial freedom begin.
Programmable payments are a model in which money ceases to be a universal means of exchange and becomes a conditional pass to certain permitted actions. Automatic execution of government algorithms instead of personal choice. That is, the mechanism will theoretically be able to filter out “unwanted” expenses, including those that contradict state policy, even if they are completely legal. The NBU emphasizes that the digital hryvnia will be “safer” than cash.
If you lose access to the wallet, it will be possible to restore it through another provider. This really solves the old problem of a lost note being lost forever, while a digital wallet is recoverable. But behind this decision lies the need for centralized control over access to money. That is, the possibility of technically and legally interfering in the management of private finances. In terms of technology, the NBU is studying a distributed ledger system (DLT), which ensures data protection and transparency. However, unlike decentralized cryptocurrencies, the digital hryvnia will be centralized. Its issue and circulation will be controlled exclusively by the National Bank. This decision emphasizes: it is not about replacing the state monetary system, but about its technological expansion with full control from the center.
The first e-hryvnia pilot project is planned for 2025. Testing will cover real operations. Citizens will be able to receive and spend digital funds, and businesses will be able to receive them. Despite the formal voluntary nature of participation, all state institutions, such as the Pension Fund, the Ministry of Social Policy, and the State Treasury Service, are involved in the project, which indicates large-scale intentions for a potential transition to a new standard of financial behavior. The regulator is preparing to conduct an active information campaign. The National Bank admits that digital currency can cause mistrust. But experts emphasize that, as in the case of cryptocurrencies, society must first accept the idea of transparency, they say, everything is visible, everything is fixed, everything is under control. At the same time, the official position remains unchanged: the digital hryvnia is not a replacement for cash, not an obligation and not a compulsion, but only “another option.” Whether to use it or not depends only on the citizen himself. However, in conditions where the state has long practiced blocking of accounts without a court order, automatic write-off of taxes and fines, and digital tools are increasingly subject to bureaucratic logic, this “voluntary” decision may well become the new norm. And then the question of where the line between convenience and control passes will cease to be theoretical.
Digital assets in Ukraine: monetary revolution against the backdrop of war
Despite the war, economic instability and constant challenges for the financial system, Ukraine continues to be one of the most digitally active countries in the world. And it is not only about banking services or “Diya”. Digital assets have become a new front for the Ukrainian user, business and even the state.
According to Statista forecasts, the market of digital assets in Ukraine will decrease to USD 152.4 million in 2025. This decline may be a symptom of both a market stabilizing after a sharp rise and an indication of uncertainty in digital regulation. However, demand is growing. As of 2025, the number of Ukrainians using digital assets is almost 2 million. This is about 5.3% of the population, which makes the country one of the leaders in Europe in terms of the rate of spread. Average revenue per user is expected to be $82.5, indicating active usage and not just “pen testing.”
In accordance with rating Chainalysis, Ukraine ranks 4th in the world in terms of cryptocurrency adoption. 12.7% of the adult population have cryptocurrency wallets, indicating a strategic choice. Against the background of financial restrictions, the collapse of banking services and logistical difficulties, Ukrainians are turning to Bitcoin, Tether and other digital assets as an alternative to the banking system. Stories of keeping savings in cold wallets, transferring money via blockchain without bank fees or interference have turned from the realm of fiction to part of the war economy.
The most vivid example is the Kuna crypto exchange, where the daily trading volume reaches 800 thousand dlrs, even in crisis conditions. This is evidenced by sex. the fact that cryptocurrency in Ukraine is not a speculative toy, but a full-fledged payment and savings tool. During the war, when access to banks, ATMs and international services was temporarily paralyzed, many Ukrainians intuitively reoriented themselves to cryptocurrency. According to analysts, Bitcoin, Ethereum and stablecoins have become a “cash cushion” for thousands of families forced to evacuate or lose contact with their native banking system. It is obvious that the lack of need for banks, ease of transfers, protection against inflation became the main reasons why digital assets turned from a “fashionable topic” into a survival tool.
In March 2022, the Verkhovna Rada approved and the president signed a law formally recognizing digital assets as legal in Ukraine. Now the state has become one of the first countries in the world that not only “allowed cryptocurrency”, but also created a framework for its circulation.
But in reality, everything is not as coordinated as it seems. And this is where the conflict arises, because a system born of freedom is likely to have a control mechanism. It is quite clear that the digital economy in Ukraine is no longer just a “project of the future”, but the vector of its development will depend on whether the state will become a partner of digital innovations, or will try to make them another tool of supervision.
Digital currency in the world: lessons for Ukraine
The world has been actively experimenting with central bank digital currencies (CBDCs) for several years now, and some countries have even reached the stage of a full-fledged launch. Their experience for Ukraine can become not just an interesting statistic, but a living laboratory, where not only ideas, but also warnings are born. For example, China became one of the pioneers, having started testing the digital yuan back in 2019. The scale is impressive: more than 260 million users, transactions worth tens of billions of dollars. The digital yuan is being actively integrated into everyday life — from public transport to social apps. However, there is also a significant concern here, because technology gives the authorities unprecedented opportunities to monitor and control every payment.
In 2020, the Bahamas went ahead of everyone else and officially launched its digital currency, the Sand Dollar. The idea was to increase access to financial services in remote areas and reduce the cost of cash transactions. However, two years have passed, and the number of digital dollar users is less than 10%. This fact reminds us that the launch of such a currency requires not only technology, but also a clear understanding of how people will use the novelty, how necessary and understandable it is.
Sweden is one of the most advanced countries in the digitalization of finances, where cash has practically disappeared. Here, the e-krona project is still at the stage of research and tests. The Swedes are trying to find a “golden mean”, because in their opinion, the digital currency should complement, not replace, traditional methods, preserving freedom of choice for citizens.
As you can see, the Chinese experience can be safely taken as a grim reminder that digital currency is easily transformed from a tool of convenience into a weapon of mass surveillance. The fact that the government gets access to all your financial behavior at the click of a button has already become a reality for hundreds of millions of Chinese. Ukrainian society, which has been tested by the arbitrariness of the security forces, tax blockades without court decisions and permanent corruption, has every reason to treat this with caution, if not outright suspicion.
It is also worth understanding that progress alone is not enough. The unsuccessful launch of Sand Dollar in the Bahamas, where the bet was placed on technology, demonstrated that it is also important to understand the needs of the population. Ukraine cannot afford to repeat this mistake. The digital hryvnia should solve problems, not create new ones, and especially if it comes to further complicating government procedures that have long suffocated small businesses and ordinary taxpayers.
Sweden, in turn, shows an example of prudence. Even in a state-of-the-art, almost completely cashless society, digital currency is being introduced not revolutionary, but cautiously, as a supplement, not a replacement. There they understand: radicalism generates resistance when it comes to money. And if the Swedes are not in a hurry, then Ukraine should not rush into the experiment, having neither technological stability nor social consensus.
The introduction of the digital hryvnia should be perceived as a profound social experiment with unpredictable consequences. And if the state follows the path of strict control, without providing citizens with basic guarantees of privacy and choice, the new currency will easily turn into financial shackles. In this process, we do not touch the issue of comfort, but have a serious challenge to democratic values and the right to privacy. The Central Bank and state bodies managing the emission and movement of digital money will have incredible control opportunities.
History shows that the concentration of such powers almost always leads to abuse. This may mean pressure on political opponents, repression of activists or even censorship of independent media due to restrictions on financial transactions. Thus, the digital hryvnia risks turning into a mechanism of suppression of freedom, hidden behind the facade of innovation.
And what will happen if the digital hryvnia becomes the only method of payments? People will lose the right to choose, lose the ability to save and spend money anonymously, as it was with cash. In this case, the financial system will turn into a control tool, where every step of the citizen is regulated and tracked. That is why it is not just an economic change, but a radical restriction of basic freedoms. Of course, on the one hand, digital technologies open up new opportunities for development, but on the other hand, we must not repeat the mistakes of authoritarian regimes, where digital currency became a tool of control and restrictions.
In order to avoid this, it is necessary to implement strict legal guarantees for the protection of privacy and user rights. It is important to create transparent oversight mechanisms that will prevent authorities from abusing their powers. And most importantly, involve society in an open dialogue so that everyone understands how the new system works and what risks it carries. At the same time, it is worth preserving the possibility of choice, so that people can use both digital hryvnia and ordinary cash. Only then will digital money become an instrument of development, and not a means of restricting freedom.
