A Ukrainian soldier holds a rocket-propelled grenade launcher (RPG) at fighting positions outside the city of Kharkiv, Ukraine February 24, 2022.
Maksim Levin | Reuters
Ukraine’s central bank is cracking down on digital currency transfers in one of the latest measures taken regarding the declaration of martial law across the country.
National Bank of Ukraine command issuer of electronic money (e-money) suspends the issuance of cryptocurrencies and replenishes e-wallets with cryptocurrencies. The written order also indicates that the distribution of the cryptocurrency is temporarily limited.
A reference to cryptocurrency may refer to fiat currency held in digital accounts through platforms such as Venmo or PayPal.
This is one of many new rules introduced by the country’s central bank as Russian forces surround Ukraine.
National Bank of Ukraine release a statement on Thursday with a series of resolutions, including a suspension of the foreign exchange market, restrictions on cash withdrawals and a ban on the issuance of foreign currency from retail bank accounts.
As Ukraine disrupts monetization avenues and Moscow launches airstrikes and ground troops, some Ukrainians are turning to cryptocurrency instead.
Kuna, a popular Ukrainian cryptocurrency exchange, shows that domestic buyers are paying a premium for Tether’s stablecoin USDT, pegged to the price of US dollars.
“We don’t trust the government. We don’t trust the banking system. We don’t trust the local currency,” Michael Chobanian, the founder of Kuna, said in an interview with Coindesk. “Most people have nothing else to choose from but cryptocurrencies.”
Tether is the most popular stablecoin by market capitalization at nearly 80 billion dollarsand unlike cryptocurrencies like bitcoin and ethereum – went through a Lots of changes in recent weeks amid growing geopolitical tensions – tether, like other stablecoins, is generally quite stable in value.
However, at the current exchange rate, the price for 1 USDT equals about 32 Ukrainian hryvnia (national currency), or $1.10, thanks to increased demand.
For months, Ukrainian leaders have sought to rebrand as a mecca for digital currencies.
Ukrainians President Volodymyr Zelenskyy signed a law in 2021 paving the way for the country’s central bank to issue its own digital currency, and recently the president and parliament introduced provisions for legalization digitization and regulation of cryptocurrencies.
During an official state visit to the United States in August 2021, Zelenskyy said on Ukraine’s “legitimate innovation market for virtual assets” as an investment selling point, and Digital Transformation Minister Mykhailo Fedorov said the country is modernizing the payments market so that the national bank can issue digital currency.
Before the Russian attack, Ukraine had a plan to open the cryptocurrency market to businesses and investors, according to the Kyiv Post. Top state officials have also touted their crypto street credits to Silicon Valley investors and venture funds — but the Russian invasion has pulled the focus away from the efforts. this force.
