Ukraine’s central bank has adjusted the fixed exchange rate of the national currency in US dollars and introduced more stringent restrictions on hryvnia transactions for citizens. According to representatives of the local crypto sector, this measure may turn more Ukrainians toward cryptocurrencies.
Wartime hryvnia restrictions are expected to increase interest in cryptocurrencies
The National Bank of Ukraine (NBU) has introduced new rules in response to changing economic fundamentals in the country amid ongoing military conflict with Russia. Monetary authorities devalued the Ukrainian hryvnia by 25% against the strong US dollar on Thursday and placed new restrictions on banking operations using the country’s fiat currency.
According to the updatedrulesfor civilians, which took effect on July 21, banks may only sell non-cash foreign currency to customers if the amount has been on deposit for at least three months with no option to terminate the contract.
The 50,000 hryvnia withdrawal limit from payment cards is now replaced by $12,500 ($340) per week. Peer-to-peer international money transfers from cards issued by Ukrainian banks have been reduced from 100,000 hryvnia (about $2,700) to 30,000 hryvnia (about $800). In addition, the limit for cross-border payments by hryvnia cards was set at 100,000 per month.
All measures introduced since the beginning of the war are temporary and will allow the economy to survive, NBU President Kirill Shevchenko assured. However, they are having a serious impact on Ukrainians, especially the millions of citizens who were forced to leave the country and still cannot return.
The latest NBU restrictions could lead to a surge in Ukrainian interest in cryptocurrencies, Mikhail Chobanyan, founder of Ukrainian crypto exchange Kuna, commented for crypto news outlet Forklog.” We expect an increase in cryptocurrency sales and usage. In Europe, 100,000 hryvnias is nothing,” the entrepreneur added.
Chobanyan also noted that most of the humanitarian aid is purchased with cards issued by Ukrainian banks and owned by individuals, so the new restrictions will hamper the work of volunteers.” Now we are completely switching these flows to crypto.” Chobanyan described the central bank’s policies as aggressive and warned that Ukraine’s banks and state budget will be the losers.
Image credits: Shutterstock, Pixabay, Wiki Commons