Ukraine’s New Fiat Currency Restrictions To Benefit Crypto Sector

Ukraine Spends Crypto Donations on Various War Equipments
  • A currency devaluation of 25% was announced on Thursday.
  • Withdrawals from payment cards have now been capped to 12,500 hryvnia per week.

National Bank of Ukraine’s (NBU) new policies is a reaction to the changing economic foundations of the nation amid a continuous war with Russia. A currency devaluation of 25% was announced on Thursday by Ukraine’s central bank, along with additional restrictions on bank activities using the country’s fiat currency.

Banks may only sell non-cash foreign currency to their clients if the sums are deposited for at least three months without the ability to cancel the contract, according to the amended rules for private people, which were imposed on July 21.

Withdrawals and Transfers Capped

Withdrawals from payment cards formerly limited to 50,000 hryvnia have now been capped to 12,500 hryvnia ($340) each week. The limit on international peer-to-peer transactions from Ukrainian bank cards has been lowered from 100,000 to 30,000 hryvnia ($800). And the monthly limit for hryvnia card cross-border transactions has been set at 100,000.

Kyrylo Shevchenko, the governor of the National Bank of Ukraine, said that all of the measures taken since the start of the conflict are transitory and would enable the economy to survive. The effects on Ukrainians, particularly the millions of people who have been displaced and are unable to return, are significant.

According to Mikhail Chobanian, the founder of the Ukrainian crypto exchange Kuna, the current NBU limitations may lead to an increase in Ukrainians’ interest in cryptocurrency. “We expect an increase in turnover and use of cryptocurrencies. In Europe, 100,000 hryvnias is nothing.”

According to Chobanian, volunteers may be hindered since most humanitarian aid is bought using Ukrainian bank cards and held by people. After announcing that the central bank’s stance is “aggressive,” Chobanian cautioned that the Ukrainian banking system and the state budget stand to suffer as a result.

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