(Bloomberg) -- Refugees from Ukraine in the European Union may soon be able to swap some of their banknotes into euros and other currencies around the bloc.
The European Commission recommends member states to set up schemes that allow each person to exchange up to 10,000 hryvnia ($339) free of charge at an official rate set by the Ukrainian central bank, mirroring an initiative Poland set up last month.
Many of the 4 million people who have fled Ukraine since Russia's invasion have faced difficulties swapping hryvnia for local currency because convertibility is limited and banks haven't been willing to take risks related to wild exchange-rate swings.
The Commission said member states should consider involving a network of banks to implement the scheme, find ways to record and check the identity of people making use of it, and agree with Ukraine's central bank the modalities for a future buy back of the notes.
“This proposal complements the humanitarian assistance provided by the EU to those fleeing from Ukraine,” according to a statement, which says the arrangement should remain in place for at least three months.
Officials have been working on a plan for weeks. European Central Bank President Christine Lagarde said on March 10 that she was liaising with other European institutions to help Ukrainian authorities and people “to access alternative currencies.”
The ECB had outlined various options in a paper for the Commission, according to a Reuters report. The preferred choice was to act as fiscal agent for the EU, and an alternative involved a mandate by the central bank of Ukraine and an EU guarantee.
The design now being recommended to EU member states is already operational in Poland. Refugees have been able to turn to some commercial bank branches for a week to make the exchange.
The National Bank of Poland then buys banknotes from those lenders and exchanges them at the Ukrainian central bank, which has pledged to accept up to 10 billion hryvnias.
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