Restricted on monetary activities, Ukrainians turn to cryptocurrencies

by nativetechdoctor
2 minutes read

As part of a nationwide state of martial law, Ukraine has ordered cash withdrawals to be restricted, all online money transfers and purchases of foreign currency suspended. Against this backdrop, Ukrainians tend to turn to crypto-currency.

According to a source from CNBC, the National Bank of Ukraine has ordered electronic money (e-money) issuers to suspend the issuance of cryptocurrencies and the depositing of funds into e-wallets. At the same time, the immediate distribution of cryptocurrencies is also limited. The text also states that the “cryptocurrency” mentioned here also includes fiat currencies held in digital accounts through platforms like Venmo or Paypal.

This is one of many new regulations introduced by the country’s central bank as Russian forces enter Ukraine, in addition to the order to suspend the foreign exchange market, limit cash withdrawals and ban the issuance of foreign currency from financial institutions. retail banking.

Faced with policies the war response noted by Kuna , a popular Ukrainian cryptocurrency exchange, domestic buyers are paying a premium for Tether’s stablecoin USDT, pegged to the price of US dollars.

Tether is arguably the most popular stablecoin by market capitalization (worth almost $80 billion). Compared to other cryptocurrencies like Bitcoin or Ethereum, Tether has a much more stable value. Therefore, it is understandable that many Ukrainians choose Tether.

However, at current exchange rates, the price of 1 USDT is approximately 32 hryvnia (Ukraine’s currency), which is equivalent to about 1.1 USD. This increase is explained by the sudden increase in demand.

Ukraine and the dream of ‘crypto paradise’

Before the military conflict broke out, Ukraine had many plans to open the cryptocurrency market to businesses and investors, according to the Kyiv Post . To that end, the Ukrainian authorities have made a lot of efforts to pursue the dream of Ukraine becoming a “paradise” for digital currencies – including the national electronic currency (digital currency) and other digital currencies. crypto currencies.

On February 9, the National Assembly of Ukraine officially approved the revised Virtual Assets bill, which includes the provisions of the Virtual Assets bill submitted in September 2021 and additional provisions proposed by the President of Ukraine – Mr. Volodymyr Zelensky .

From a bill to an official law, Ukraine’s Virtual Assets law has opened up a legal and safe path for cryptocurrencies, opening up new opportunities for this country.

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