Ukraine promotes cryptocurrency through new regulations

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2022-07-26 19:35:39

New regulations of the state bank of Ukraine (NBU) will restrict the use of fiat money. Instead, promote crypto-economic development in the context that the country’s financial situation has undergone a fundamental change because of the war with Russia.

Regulatory changes in Ukraine

Financial regulation changes in Ukraine

National Bank of Ukraine has fallen 25% The official exchange rate of the Hryvnia (Ukrainian fiat currency). Along with that, the bank has also introduced new limits on banking activities. The move changed the exchange rate of the Hryvnia to the US dollar and also imposed restrictions on various groups of businesses and households. Accordingly, it partly supports economic recovery in times of war.

In addition, the change in the basic parameters of the Ukrainian economy and the strengthening of the US dollar against other currencies are additional reasons for these changes.

Many experts believe that the move to change the exchange rate of Hryvnia luxurious USD could help the public to be more interested in the cryptocurrency sector. Currently, Ukrainians can choose to switch to using cryptocurrencies to overcome the fiat currency barrier in the near future.

The representative of the crypto community in Ukraine also said that these barriers will help the crypto industry.

According to official sources, individuals and banks can only sell foreign currency “non-cash” to customers in case that money is deposited for a minimum period of 3 months and the two parties do not have the option to terminate the contract. .

Adapting to new regulations

On the other hand, Ukrainen also changed other withdrawal regulations. If in the past, people were entitled to withdraw maximum 50,000 hryvnia then the limit for each withdrawal per week is only 12,500 hryvnia (~$340). Peer-to-peer transfers from cards issued by Ukrainian banks have decreased from 100,000 hryvnia down 30,000 hryvnia.

The amount of international transactions is also reduced to 100,000 hryvnia per month. However, the governor of the NBU – Kirill Shevchenko – said that these are only temporary regulations.

The above obstacles were assured by him as special measures needed in the context of the ongoing war.

The war was an important factor affecting the Ukrainian currency
The war was an important factor affecting the Ukrainian currency

Restricting monetary activities forces Ukrainians to switch to cryptocurrencies

These moves have been making a significant impact on the lives of Ukrainians. As millions of Ukrainians have been evacuated from their home country and are still struggling to return home. The above regulations only make it more difficult for citizens to return to Ukraine.

Cryptocurrencies get strong interest

The National Bank of Ukraine restrictions have now increased interest in cryptocurrencies.

In an interview with crypto news outlet Forlog, Mikhail Chobanyan, founder of Ukrainian crypto exchange Kuna stated:

We expect an increase in crypto revenue and usage. In Europe, 100,000 hryvnias is nothing.”

Chobanyan also mentioned that the introduction of the new limits has hindered the volunteers’ work. Most of the humanitarian assistance was purchased with cards owned by Ukrainian banks by private individuals.

Due to the restrictions, the funds will be transferred entirely via cryptocurrency. Chobanyan has also called the NBU’s stance aggressive and also warned that Ukraine’s banks and state budget will be at a loss because of such strict policies.

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