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Jul 26,2022

Ukraine To Boost The Crypto Industry Through New Fiat Rules

Ukraine has introduced new rules restricting the use of fiat, which in turn would help boost the crypto economy. The National Bank of Ukraine has introduced certain new rules due to the change in the country's financial fundamentals as a result of the ongoing military war with Russia.

The NBU has now devalued the hryvnia against the US dollar by 25%. Along with this, the bank also set new limits for banking operations. This step of changing hryvnia to US dollar exchange rates as well as limiting the amount of exchange can help increase the popularity of the crypto sector.

People may choose to switch to cryptocurrency to bypass Fiat restrictions in the coming time. A representative of the local Ukrainian crypto sector is also of the opinion that these Fiat restrictions will contribute to the benefit of the crypto industry.

The new regulations updated that banks can sell cashless foreign currency to customers to private individuals if only the amount of currency is deposited for a period of at least three months and also without the option to terminate the contract.

New Restrictions Are Temporary

The restriction also includes the replacement of the 50,000 hryvnia ceiling for limit withdrawals with a weekly limit of 12,500 ($340). In addition, peer-to-peer transfers from cards issued by Ukrainian banks were reduced from 100,000 hryvnias to 30,000 hryvnias.

The limit for cross-border settlement was also set at 100,000 per month. However, the imposed restrictions are clearly of a temporary nature. Kirill Shevchenko, the governor of NBU, mentioned that these measures are temporary.

He assured that all these restrictions were in fact special measures to be taken because of the ongoing war.

All these actions were taken to keep the economy running. These actions caused a significant impact on the Ukrainian people. Millions of Ukrainian citizens were forced to evacuate the country and are still trying to return to their homes. The restrictions only made it more difficult for citizens to return to Ukraine.

Surged Interest In Crypto

Restrictions by the National Bank of Ukraine have now increased interest in cryptocurrencies.

Mikhail Chobanyan, the founder of Ukrainian crypto exchange Kuna, in a recent interview with crypto news outlet Forlog, said,

We expect an increase in the turnover and use of cryptocurrencies. In Europe, 100,000 hryvnias is nothing," added the businessman.

Chobanyan also mentioned that the introduction of new limits caused obstacles in the work of volunteers. Most of the humanitarian aid was purchased with cards issued by privately owned Ukrainian banks.

Due to restrictions, funds will be channeled entirely through cryptocurrencies. Chobanyan also called the position of the NBU aggressive and also warned that Ukrainian banks and the state budget will lose because of such a strict policy.

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