The NBU withdraws obsolete means of payment from circulation. Which means are those exactly?

Withdrawal from circulation of 25 kopeck coins

• 25 kopeck coins will cease to be used for payment in Ukraine and will be withdrawn from circulation from 1 October 2020. This means that they will not be accepted as payment for goods or services.
• Why? Because 25 kopeck coinsare not being exchanged due to the withdrawal from circulation of coins with denominations of 1, 2 and 5 kopecks, which started last year. Thanks to their withdrawal from circulation, this problem will be solved.
• But this is not a cause for concern.Citizens will be able to exchange these coins without limitations and free of charge for coins and banknotes of other denominations in multiples of 10 kopecks during the next three years:
  • for the first year after the withdrawal date through 30 September 2020 inclusively – in any Ukrainian bank;
  • for three years after the withdrawal date through 30 September 2023 inclusively – at the National Bank of Ukraine and authorised banks (Oschadbank, PrivatBank, Raiffeisen Bank Aval).

Withdrawal from circulation of obsolete banknotes

• Hryvnia banknotes issued before 2003 will cease to be used for payment in Ukraine and will be withdrawn from circulation from 1 October 2020. This means that they will not be accepted as payment for goods or services.
• Why? Too many denominations cause confusion in wallets and take extra time during cash payments.
• But this is not a cause for concern for those who have such banknotes.Citizens will be able to exchange them without limitations and free of charge for coins and banknotes of other denominations during the next three years:
  • for the first year after the withdrawal date through 30 September 2020 inclusively – in any Ukrainian bank;
  • for three years after the withdrawal date through 30 September 2023 inclusively – at the National Bank of Ukraine and authorised banks (Oschadbank, PrivatBank, Raiffeisen Bank Aval).

Active withdrawal from circulation of 1-, 2 Hryvnia banknotes

• From 1 October 2020, the National Bank will more actively withdraw from circulation 1- and 2-Hryvnia denomination banknotes and 1 Hryvnia gold coloured coins 1996.
• Unlike the 25 kopecks and old banknotes put into circulation before 2003, they will remain in cash circulation for now. They do not need to be exchanged and can still be used for payments. But these banknotes and coins, if received by banks, will not be returned into circulation.
• Gradually, they will be replaced by corresponding denominations of circulating silver coins of 2018.

What will happen to the withdrawn money?

• Withdrawn coins and banknotes will be disposed of by the National Bank.
• The patterns of the coins will be removed with special equipment, and the metal will be reminted.
• The banknotes will be disposed of with the help of special modern equipment with online modules for destruction. The banknotes will be cut into small pieces (shredding), which cannot be recovered, after which this crushed mass will be disposed of at solid waste landfills.
• To ease cash settlements in Ukraine, the rules for rounding total (in check) amounts of cash payments for goods (works, services) to multiples of 10 kopecks has been in force in Ukraine since 2018.

Why is the NBU doing this?

• This decision of the National Bank is the next step in the policy of optimising Ukraine’s cash flow.
• In future, Hryvnia banknote and coin series will be reduced from 17 to 12 denominations in conformity with the most common practice worldwide: 6 coin denominations and 6 banknote denominations.
• This will make cash payments convenient, simple and easy.
• Key reasons and advantages of withdrawal of low-denomination coins from circulation:
  1. Simplification and convenience of cash payments.
     Old banknotes, put into circulation before 2003, are rarely used as a means of payment. Now less than 2 % of the total number of banknotes remains in circulation. For the past three years, their volume in circulation has barely changed, i.e. citizens never use them for payments, these banknotes are not collected and do not find their way to banks. Their withdrawal from circulation will not cause inconvenience to citizens, while business and the state will benefit.
  2. Positive economic effect.
     The expenses of the state and participants of cash circulation on production, processing, transportation, storage of banknotes and coins will now be reduced.
  3. Improving the quality of cash in circulation.
     • It is important for the National Bank that the national currency in circulation is reliable and high quality.
     • Ukrainians should be sure that the cash received in shops, bank cash desks or ATMs is absolutely usable for payment.
     • Withdrawal of obsolete banknotes and replacement of worn-out banknotes of 1 and 2 Hryvnia denominations with metal coins will increase the protection and quality of money and make payments easy and convenient.