On Thursday, the National Bank of Ukraine made a statement clarifying that cryptocurrency transactions using native currency are currently prohibited. This is part of an overall effort to keep capital within Ukraine’s borders during martial law.
Stopping ‘Quasi Cash’ Transactions
According to the statement, assets that can be converted for cash or are considered ‘quasi-cash’ transactions cannot now be purchased with foreign currency. The limit is 100,000 Hryvnias (UAH). This is equivalent to $3,300
The bank stated that quasi-cash transactions could include replenishment of electronic wallets or brokerage or forex accounts as well as payment of traveler’s checks and purchase of virtual assets.
Only capital in national currency is allowed to leave the country. It can only be sent to people internally displaced from Ukraine using P2P transfer. Transfers of this nature are subject to the $3,300 cap.
The “unproductive capital outflow” from Ukraine is what the central bank intends to stop with the restrictions. Quasi cash transactions were reportedly used to bypass existing financial restrictions by the bank, primarily to invest overseas, which is against martial law.
The financial authority acknowledges that foreign Ukrainians who have their national currency accounts in other countries still require international payment settlement systems. These transactions have been limited to a certain extent.
On April 20, the Resolution of the Board of the National Bank of Ukraine made the changes. PrivatBank, the largest bank for commercial transactions in Ukraine, has already implemented these restrictions. They will continue to be in effect as long as martial laws are in force
Ukraine accepts Cryptocurrencies
These recent restrictions don’t seem to be related to any wider aversion to cryptocurrency from Ukraine. In fact, President Volodymyr Zilensky signed a bill last month to establish a legal framework for cryptocurrency during the Russian conflict.
Since the beginning of the war, cryptocurrency has actually been a great help to Ukraine. Since the beginning of the war, Vice PM Mykhailo Fedorov solicited donations from around the world in many virtual assets, including Bitcoin and Ethereum, Polygon, Dogecoin and Polygon.
To support its military, the Ukrainian government received more than $100M in cryptocurrency. To show support for Ukraine, an Ethereum mining farm offered to stop serving Russian clients.
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