Ukraine’s central bank has reduced the U.S. dollar fixed exchange rate and imposed stricter restrictions on transactions in hryvnia for its citizens. According to an official from the crypto sector, these measures will likely convert more Ukrainians into cryptocurrency.
The War-Time Hryvnia Limits are Expected To Increase Cryptocurrency Interest
The National Bank of Ukraine (NBU) has introduced new rules in response to the changing fundamentals of the country’s economy during an ongoing military conflict with Russia. On Thursday, the monetary authority devalued Ukrainian hryvnia by 25% against strong U.S. dollar and placed new restrictions on bank operations using the national fiat.
The updated rules for private individuals were implemented July 21. Banks can only sell non-cash foreign currencies to customers if they have deposited the funds for at least three consecutive months. There is no option to cancel the contract.
A weekly limit of 12,500 dollars ($340) has replaced the 50,000-hryvnia withdrawal ceiling from card payment cards. The amount of peer-to-peer international transfers from Ukrainian bank cards has been reduced from 100,000 to 340 hryvnia ($approx. $2700) and 30,000 hryvnia ($800). The limit on cross-border settlements using hryvnia card cards is 100,000 per month.
Kirill Shevchenko, NBU Governor, stated that all the economic measures taken since the start of war were temporary and would allow for the economy’s survival. However, they are seriously affecting Ukrainians, especially those millions of the nation’s citizens who have been forced to leave the country and are still unable to return.
The latest NBU restrictions may lead to a surge of Ukrainians’ interest in cryptocurrencies, the founder of the Ukrainian crypto exchange Kuna, Mikhail Chobanyan, commented for the crypto news outlet Forklog. “We expect an increase in turnover and use of cryptocurrencies. In Europe, 100,000 hryvnias is nothing,” the entrepreneur added.
Chobanyan pointed out that volunteers will be hindered by the new limitations, as most humanitarian assistance is paid for with cards issued and maintained by Ukrainian banks. “Now we will completely switch these flows to crypto,” said Chobanyan who described the central bank’s policy as aggressive and warned that Ukrainian banks and the state budget will be the losers.
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