Amid Daily Bombings, Ukraine's Plans to Transform Government Services with Blockchain Surge Forward
Judging by the incredibly stoic demeanor of Yulia Parkhomenko, one of the directors within Ukraine's Ministry of Digital Transformation, you would never guess that she and her colleagues are forging ahead with their plans to revolutionize Ukraine's government services while bombs are randomly falling around them and electricity is only available for four hours on a good day. But with an eye towards a fully digitally transformed country (a vision that comes straight from Ukrainian President Volodymyr Zelensky) and in a demonstration of true grit, that's exactly what she and her team are doing, and they are moving at a lightning pace. Also, as Parkhomenko explains to Blockchain Journal editor-in-chief David Berlind at the World Economic Forum in Davos, Switzerland, Ukraine plans to run its first Central Bank Digital Currency (CBDC) pilot in 2024 (full-text transcript appears below).
Published:January 18, 2023
9 min read
Audio-Only Podcast
Despite War, Ukraine's Ministry of Digital Transformation Remains Undeterred in its Strategic Mandate
David Berlind: Yulia Parkhomenko, you are the Director in the Ministry of Digital Transformation of Ukraine. So this is going to generate a lot of interest with our audience, mainly because you're from Ukraine and everybody's following what's going on in Ukraine very carefully. And you should know that, I know that speaking for the whole world, our hearts and minds go out to you in Ukraine and what's going on there. We feel terribly about it. But what also is amazing is that you continue to move forward with your work and your mission, as do many of the Ukrainians in whatever jobs they hold. And I am curious to first learn, what is it that the Ministry of Digital Transformation does in Ukraine? What's their mission?
Yulia Parkhomenko: I want to mention that our Ministry created three years ago, it's like a young Ministry in our country and we are creating a digital economy and we developed it and create new projects and helps our country to move on and new technologies, Artificial Intelligence, Blockchain technologies, CBDCs, visual assets, and any other projects. So our Ministry has a huge team and we continue to work in Ukraine with all our team in Ukraine, but somebody in Kiev, somebody in other cities, where it's really hard without electricity. So we try to find the places with generators or private banks that helps us to be in touch and continue our work.
Berlind: So electricity is an ongoing problem.
Parkhomenko: Yeah.
Berlind: We see that in the news, especially, I'm in the United States and we see a lot of that news coverage, where it seems like the power grid gets rebuilt by somebody and then a day later it gets bombed and then it has to be rebuilt and it just seems like an endless cycle. That must be very difficult.
Parkhomenko: Absolutely, yes. Because more than half our critical infrastructure is ruined and we're no electricity more than 20 hours per day all over the country and after each bombs it's like worser and worser. And so it's really hard situation now.
Berlind: I can't imagine those circumstances. It just must be terribly difficult to get any work done. I don't think I could actually work having that going on around me. But somehow it seems like Ukrainians are just a very, very resilient people and just get about their business. Going back to the Ministry of Digital Transformation, what's an example of something, a project that needed some form of transformation where the old way of doing it was needed to be updated and you're going through the process of digitally transforming that process right now?
Parkhomenko: The work of our ministry, it's like a new technology and we help our ministries, our governments in our country to transform everything in their work. For example, we have a CDTO, it's in each ministry, which helps to create everything like digital, not paper. Maybe you heard that our president tell that, our purpose now paperless in our country. So you can use everything just by phone. You can just have list at, I don't know, to hospital. And the other also, we have an app or for example, it's Diia app. It's like a super new technology would help us not to bring our documents with us. Even driving license, passports, vaccinate certificate. It's every document we have, only in one app, we can show, scan QR code and everywhere it's valid.
Berlind: So that's amazing. So what you're basically doing is, the whole country's going paperless, you mentioned one thing that you're doing, which is you're helping the other ministries. You're sort of a consultancy to the other ministries in helping them to digitally transform, to take processes that are based in paper or some other form and move it into complete digital means.
But also not just digital, but mobile. It sounds like everything is all about the mobile phone and that is extremely advanced for a country to be doing. I would argue that the United States and a lot of other advanced Nations around the world are way behind. It sounds like you're actually ahead of the curve when it comes to doing these sorts of things. It sounds like there's actually a mandate from somewhere to get these things done. And that by itself is the thing that's missing in a lot of other countries. Does that mandate come from the top, from President Zelensky and who came up with this idea to just get the whole country digitally transformed?
Parkhomenko: Our president, of course.
Berlind: Yes. Okay.
Parkhomenko: The main purpose of before the war and during the war also, we made all [of] our country digital, every person can do everything by his phone. That's all.
Berlind: That's amazing. So you're helping with digital transformation. There's a lot of technologies involved in digital transformation, but I'm here with Blockchain Journal and I'm interested to hear: what is the role that blockchain plays in some of these projects that you're working on?
Parkhomenko: For example, last year in June we joined European Blockchain partnership like as [an] observer. And now we are creating, by the way, in September we're creating a working group in our ministry with civil servants, with Blockchain specialists from international and Ukrainian companies. And now we are creating [an] entire concept of using blockchain technology in the government, in registers, in other services, which helps us to show people and the government why it's so useful to change centralized technologies to digitalized technologies.
Berlind: Okay. So is there a specific project where that idea of moving from a centralized regime to more of something decentralized is making a difference? Where are some examples of that?
Parkhomenko: No, for example, the main purpose of this concept is to show what the difference is of that we already used in our registers and what were the advantages when we will use Blockchain technology.
Berlind: Okay.
Parkhomenko: It's easy, it's transparent, it's clear, and it helps us to be transparent forever.
Berlind: So the transparency is a big...
Parkhomenko: Yes, of course.
Berlind: Really, especially with [the] government. Government, there's a lot of opportunity for government organizations to be transparent with the people of their country. And so blockchain...
Parkhomenko: Yes, and we believe that blockchain will help us to be more transparent.
Berlind: Yeah. Well, it's surprising how transparent you have been over the last couple years. I mean, you guys are sharing everything. It's amazing. And a lot of us are paying very close attention. CBDC, Central Bank Digital Currencies is something that I think you are involved with. So can you tell us a little bit about what Ukraine is doing with CBDCs?
Parkhomenko: Of course. Together with [the] National Bank of Ukraine, now we are preparing a concept of implementing the CBDC in our country and to roadmap, in 2024, we will create our own national pilot project. And of course, the National Bank of Ukraine, [is] the main player in this role of course, but our Ministry helps with expertise, with even study. We study there, not only from the National Bank and from the other governments, what this CBDC and what this technology can do for us. So together, I hope and I believe in it, that we will create a big and huge concept and create a good pilot project that will help us to integrate CBDC in our country.
Berlind: So you'll have a digital version of your fiat currency, of the country's fiat currency? Go ahead.
Parkhomenko: We are working on, to create just a concept. We have now digital currency now, because we just preparing technical equipment and the solids will help us to create a pilot project.
Berlind: Okay. Do you think that the pilot project will be based on Blockchain or will it be some other digital currency technology?
Parkhomenko: Well, we discuss on it. So we don't know yet.
Berlind: Undecided.
Parkhomenko: Yes, we didn't decide. We didn't decide yet.
Berlind: Yeah.
Parkhomenko: But I hope so, yes.
Berlind: Okay. A lot of the CBDC discussion gets to whether or not it would be on a public Blockchain or a private one. I think a lot of national banks, they're not comfortable putting something like that on a public Blockchain.
Parkhomenko: Of course.
Berlind: Is that where your mind is at? Are you thinking more of a privately permissioned blockchain?
Parkhomenko: We have not decided yet. Really, we just discuss it because it's like, difficult to use. For example, private, okay, it's like okay for a bank, it's like private, yes, Blockchain. But if it's public, we just discussed this.
Berlind: Well, 2024 is right around the corner. We're already in 2023. And there are plenty of other countries that are behind on that schedule too. So you guys are really moving quickly, especially given all of the stress you're under from a war. I mean, it's just amazing to see that, how you move forward. I heard you mentioning to another person here, how it is you got from Kyiv, you're in Kyiv, is that right?
Parkhomenko: Yeah.
Berlind: How you got from Kyiv to Davos? This will be interesting to people because we often wonder how you get around, how you get out in and out of the country safely. So how did you get here, if you can share that?
Parkhomenko: It's a really long trip. I drove by my car to Austria to Vienna, and then I had a flight to Zurich and then I have five trains to get here.
Berlind: Yes, a bunch of trains from Zurich, yeah.
Parkhomenko: Yeah. So it's like a long trip and it took a long time to cross the border, because it's not so big queue, but it takes more than two or three hours to stand by the border area.
Berlind: Is it a safe journey?
Parkhomenko: Yes, it's safe. It's much safer than at the beginning of the war.
Berlind: Well, we have a picture in our mind of just everywhere, I would say, I have an image in my mind of various parts of Ukraine just being randomly bombed. And so it seems to me like anybody at any time...
Parkhomenko: We continue to drive when it's alarm, it's really dangerous and thanks God, everything's fine. We are gone because we have a purpose to get here. So it's our main purpose. We should come here and talk about it and talk about Ukraine and tell about the health situation in Ukraine. So we are going. So we have no choice.
Berlind: How do you have the presence of mind to just continue with your work, with all of this going on around you?
Parkhomenko: Meditation.
Berlind: Meditation.
Parkhomenko: Meditation helps me.
Berlind: Well, I think meditation could help a lot of people.
Parkhomenko: It's the truth. Yeah.
Berlind: Well, we pray for your safety and we'll certainly be keeping an eye on how the Ministry of Digital Transformation continues with its mission. It seems very exciting and it seems like you're moving very quickly. So Yulia Parkhomenko, thank you very much for joining us here on Blockchain Journal.
Parkhomenko: Thank you for the invitation. Thank you so much.
Berlind: Have a great rest of the week here at Davos.
Parkhomenko: Thank you. I'm excited for it.