After declaring independence, Ukraine was tasked with creating its national currency as a critical condition for its political and economic independence. On November 1, 1991, the Verkhovna Rada approved the concept of transition of the Ukrainian economy from a centrally planned to a market economy, which included the introduction of a new monetary system.

In the period after Ukraine’s declaration of independence, Soviet rubles remained in circulation, and their printing depended on Russia. The need to create its own currency was also reinforced by the price liberalization planned for January 1992. However, the issue of building a national monetary system was complicated by the severance of economic ties, which was accompanied by a growing decline in production, rising inflation, and the onset of a deep financial crisis.

Therefore, in January 1992, a temporary currency, the coupon banknote, was introduced. It was to be used for only a few months. However, its use was delayed until 1996. The Ukrainian karbovanets (an alternative name for coupon banknotes) became the sole means of payment in Ukraine on November 12, 1992.

In 1992, work began on creating a functional national currency, commonly called the hryvnia. At the same time, work began on its design, involving artists Vasyl Lopata and Borys Maksymov.

Subsequently, starting in the second half of 1992, Ukraine continued to experience economic stress, including a sharp rise in inflation and a rapid depreciation of the Ukrainian karbovanets. Coupons in denominations from 1 to 100 karbovanets could not fully cover the economy’s cash needs. The National Bank decided to introduce new, higher denominations of coupons to replace the small denominations withdrawn from circulation. The loss of value of coupon notes continued until 1996.

On June 28, 1996, the Verkhovna Rada of Ukraine adopted the Ukrainian Constitution. Article 99 states:

“The monetary unit of Ukraine is hryvnia.

The primary function of the state’s central bank, the National Bank of Ukraine, is to ensure the stability of the monetary unit.”

On August 25, President Leonid Kuchma signed the Decree “On Monetary Reform in Ukraine,” which introduced the hryvnia, Ukraine’s national currency, and its hundredth part, the kopiika, into circulation.

On September 2, 1996, the NBU issued banknotes in denominations of 1, 2, 5, 10, 20, 50, and 100 hryvnias and change coins in denominations of 1, 2, 5, 10, 25, and 50 kopeks and stopped issuing (issuing) Ukrainian karbovanets, which were subject to exchange for hryvnias at the exchange rate: 100,000 krb = 1 UAH.

Ukraine did not have printing equipment, so the hryvnia was printed abroad. The currency was delivered from Canada and the United Kingdom under state secrecy, with the involvement of the Security Service of Ukraine, and the operation was called “Shield of Ukraine.”

The first hryvnia banknotes had a completely different look and different images. The 10-hryvnia banknote mistakenly depicted Pylyp Orlyk instead of Ivan Mazepa. The 1 hryvnia bill featured the ruins of Chersonesos, which remained on the bill until 2004. Then, it was replaced with an image of Volodymyr’s City in Kyiv, as ruins on the national currency were considered an evil symbol. However, possible political motives for this decision are also mentioned.

The reform was carried out in just two weeks, from September 2 to 16, 1996. After that, the circulation of the Ukrainian karbovanets was stopped, and from that day on, the hryvnia has been the only legal means of payment in Ukraine.

The Ukrainian hryvnia has become a symbol and practical demonstration of Ukraine’s independence, and its design has become an essential tool for preserving and promoting culture and national memory. The 1996 reform itself has become one of the most successful in the history of modern Ukraine, significantly slowing down inflation, stabilizing the economy, and balancing the currency.