5 Reasons Ukraine’s Fintech Sector Is Growing Despite War – TechCrunch

Ukrainians often have pioneering market-leading companies and building products that positively impact society, especially in the fintech sector.

Despite the obstacles of the war, the Ukrainian fintech community is working to create better infrastructure and regulation for the country, which can attract valuable companies and institutional investors from different backgrounds.

It is a valuable market

I’m sure many investors think the country’s IT sector is a risky investment right now. But it is still business as usual at fintech companies here. They have proven their resilience even under wartime conditions, and impressively, 90% of Ukrainian tech startups are still hiring.

In March, Ukrainian President Volodymyr Zelenskyy signed a bill to establish a regulatory framework for cryptocurrency in the country. Although the bill does not allow you to use digital assets as a payment method, it seeks to create good conditions for establishing a strong cryptocurrency market.

Cryptocurrency exchanges can now require a license to operate legally in the country. Banks will be able to open accounts for crypto companies, which can choose different licenses depending on what they do.

The Ukrainian IT sector is still growing

In the first five months of 2022, Ukraine’s IT sector generated approximately $3.2 billion from exports – 27% more than the same period in 2021, and accounted for almost half of the country’s total volume of export services.

One of the main goals of the Ukrainian government is to increase the IT sector’s share of the country’s GDP from the current 4% to 10% by 2024.

The government’s support and the strong growth together give a strong signal about how the IT sector is ripe for investment.

Global financial and technology firms support Ukraine

Earlier this month, the Ukrainian Ministry of Digital Transformation unveiled Digital4Freedom – a global initiative that is the primary source of charitable donations for tech companies to support Ukraine.

Digital4Freedom is part of the global UNITED24 effort and allows everyone around the world to make a monetary contribution to rebuilding the country’s economy.

The program consists of nine projects presented to 40 companies, the vast majority of which have agreed to help with financial contributions or technology solutions.

Amazon, for example, will reportedly provide over $100 million in cloud hosting services for Ukrainian state registries and plans to develop solutions to deploy artificial intelligence in courts.

Crypto exchange Binance will become an official partner of the Ministry of Digital Transformation of Ukraine to offer educational projects in IT, web3 and finance.

Meta, with the support of the Ministry of Digital Transformation, recently launched a $1.5 million aid program to restore the Ukrainian economy, helping small and medium-sized businesses with a specialized training center.

Startups are an integral part of the Ukrainian economy

Ukrainian companies expect a reduction in the production of goods and services due to the war. In addition, the company’s managers predict that the next 12 months will bring inflation and devaluation of the hryvnia.

Ukrainian tech startups are dedicating their efforts to lifting the industry to new heights. They are set to become the cornerstones of a new layer of technology companies that will add significant value to the economy.

Fintech is growing rapidly despite setbacks

This year, Ukrainian lawmakers introduced the Law of Ukraine on Payment Services (LPS), which will provide a better regulatory environment for the fintech sector, including for payment services.

In addition, the Ukrainian Association of Fintech and Innovation Companies (UAFIC) became the first non-EU member to join the European Digital Finance Association (EDFA). Both organizations work together to strengthen the fintech landscape in Ukraine.

I believe Ukraine’s resilience in the face of Russian aggression and the tremendous growth of the fintech landscape despite the crisis has proven that investors should not hesitate to invest in the fast-growing industry.

Despite the difficult situation in the country, the industry continues to develop. While attending a number of conferences and fintech events, I meet investors from all over the world who are interested in companies from Ukraine. All this tells us that the outlook for fintech in Ukraine looks good and that now is an excellent time to invest in it.