The Ukrainian government is contemplating a radical move to tackle corruption in the country by imposing a complete ban on the circulation of cash. Rostyslav Shurma, the Deputy Head of the Presidential Office, made this announcement during the London Ukraine Recovery Conference. He stated that the government will present a roadmap on whether to implement this measure or not, expressing his hope that the decision will be a resounding yes. According to Shurma, becoming the first completely cashless economy would help in preventing bribery and potentially eliminate 95-99% of all corruption cases in Ukraine.
While this proposal may seem promising in theory, economists have expressed doubts about its feasibility. Ukrainian financial analyst Aleksey Kushch pointed out that banning legal tender would result in a flow of the national currency, hryvna, into dollars, leading to the collapse of the currency. Additionally, he highlighted that during power outages, hard cash becomes the only means of payment, rendering a cashless system ineffective.
Alexander Okhrimenko, the head of the Ukrainian Analytical Center, also criticized Shurma’s proposal, arguing that people have been using offshore companies to pay bribes for a long time, indicating that cash has little effect on corruption. Okhrimenko dismissed Shurma’s statement as “meaningless publicity” and deemed it “stupid”.
Currently, around 40% of settlements in Ukraine are conducted in cash. Despite the potential challenges and criticisms, the government seems determined to explore the possibility of a cashless economy as a means to combat corruption. This decision is part of a broader effort to reform and recover Ukraine’s economy and tackle deep-rooted corruption issues.
It is important to note that corruption has long plagued Ukraine and has been a major concern for both the government and the citizens. The country has made progress in recent years in addressing corruption through various reforms and initiatives. However, more needs to be done to root out this deeply ingrained problem.
The proposal to ban cash circulation is a bold and ambitious step that reflects the government’s commitment to combating corruption. If successfully implemented, it could significantly reduce the opportunities for bribery and illicit transactions. A cashless economy would create a more transparent financial system, making it easier to track and trace transactions, thus deterring corruption.
However, the transition to a cashless society is not without challenges. It requires building a robust and secure digital infrastructure, ensuring widespread access to electronic payment systems, and educating the population on the benefits and proper usage of digital payments. The government would also need to address concerns about privacy and security to gain public trust and acceptance.
Moreover, the success of a cashless economy heavily depends on the government’s ability to tackle the root causes of corruption beyond the mere absence of cash. Strengthening institutions, promoting accountability, and creating a culture of transparency are crucial factors that must be addressed simultaneously.
While the feasibility and success of a cashless economy in Ukraine remain uncertain, it is commendable that the government is exploring innovative solutions to combat corruption. The fight against corruption requires comprehensive and multifaceted approaches, and the proposal to ban cash circulation can be seen as a significant step in the right direction. Whether or not this proposal becomes a reality, it signals the government’s determination to tackle corruption at its core and build a more transparent and accountable society.