According to the announcement made by the National Bank of Ukraine on Thursday (April 21, 2022), restricting the use of the Hryvnia for crypto purchases will help to staunch the unproductive outflow of capital from domestic banks.
JUST IN: 🇺🇦 Ukraine has banned #crypto purchases with the local currency and will only allow purchases with foreign currency with a monthly limit of $3,300.
As geopolitical uncertainty remains due to the tensions with Russia, the demand and volume of cross-border settlements have reportedly skyrocketed. However, the NBU argued that international reserves must be protected and measures are needed to secure capital within the country.
On the other hand, payment cards are also used to pay for quasi cash transactions, which are mainly carried out to circumvent the current restrictions of the National Bank, in particular for investing abroad, which is prohibited under martial law. Therefore, the relevant transactions should be interpreted as leading to unproductive capital outflows. As a result, the National Bank partially limited the possibilities of such operations.
Ukraine Leverages Cryptocurrency During War With Russia
President Volodymyr Zelenskyy’s jurisdiction has supposedly accelerated crypto adoption since the start of Russia’s invasion earlier in the year. The country has received around $100 million in crypto donations so far and launched an NFT museum to preserve an accurate record of recent events.
Furthermore, President Zelenskyy signed a bill legalizing the country’s booming cryptocurrency industry back in March 2022.
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