TL; DR Breakdown
- Ukraine halts purchase of crypto with fiat
- The country plans to eliminate the outflow of capital
- Banks have previously banned crypto purchases
The National bank of Ukraine has announced a ban on purchases of digital assets and related products using the native currency of the country. This is in line with the several measures to reduce the outflow of capital in the country. The rule is also coming at a period when martial law rule is in place as the country continues to fend off an attack from Russia.
Ukraine wants to eliminate the outflow of capital
In its post earlier, the bank ordered all suspensions to purchase digital assets using the hryvnia, the country’s currency. The move was one of the few restrictions that the bank highlighted on the several cross border operation suspension. With the new update, Ukrainians who choose to purchase digital assets can use any other foreign currency that the platforms support. However, the bank has capped the total purchasable digital asset to $3,300 every month.
The bank also noted that the limit would also cover peer to peer transactions carried out internationally. In the announcement, the bank of Ukraine has added digital assets and other electronic money measures such as wallet payments and travel payments to its list of Quasi Cash Transactions. With the ban, the bank intends to remove the outflow of capital which it termed unproductive, from the country in a period where martial law is in force.
Banks have previously banned crypto purchases
In its post, the NBU noted that this measure would help them eliminate all pressure that their international reserve may have in the future. It noted that it would help them improve their foreign exchange, which would, in turn, work in their favour if the country suffered restrictions. The bank mentioned that it predicted that citizens of Ukraine would be taking a shadow under international transactions when martial law was announced across the country.
The martial law saw a larger part of the Ukraine population desert the country as the Russian army started to gain ground in the country. The new update was added to the April 20 resolution by the NBU board, which took effect on Wednesday. According to several sources, some banks have previously announced banning the facilitation of digital asset transactions across Ukraine. Some kicked the ban into effect in March, with PrivatBank leading the charge. The restrictions were met with shock, with the Ukraine government previously giving a hint of regulating and legalizing digital assets across the country.