Ukraine to Boost Crypto Industry Through New Fiat Rules
Ukraine has introduced new rules restricting fiat usage, which in turn will help boost the crypto economy. The National Bank of Ukraine had introduced certain new rules due to changes in the country’s economic fundamentals due to the ongoing military war with Russia.
The NBU has now devalued the hryvnia against the US dollar by 25%. At the same time, the bank has set new frameworks for banking operations. This move of changing the exchange rates of the hryvnia to the US dollar and also imposing a limit on the amount of exchange may help increase the popularity of the crypto sector.
People may choose to switch to cryptocurrency to bypass the Fiat restrictions in the coming times. The representative of Ukraine’s local crypto sector is also of the opinion that these Fiat restrictions will benefit the crypto industry.
The new regulations have updated that for private individuals, banks can sell non-cash foreign currency to customers if only the amount of the currency has been deposited for a period of at least three months and also without the option to terminate the contract.
New restrictions are temporary
Part of the restrictions also includes replacing the 50,000 hryvnia ceiling for withdrawals with a weekly limit of 12,500 ($340). In addition, peer-to-peer transfers from the cards issued by Ukrainian banks have been reduced from 100,000 hryvnias to 30,000 hryvnias.
Even the limit for cross-border settlements is set at 100,000 per month. However, the restrictions imposed are apparently of a temporary nature. Kirill Shevchenko, the governor of the NBU has mentioned that these measures are temporary.
He has assured that all these restrictions are in fact special measures which must be taken because of the continuing war.
All these actions are carried out to maintain the operation of the economy. These actions have caused significant impact on the Ukrainian people. Millions of Ukraine’s residents have been forced to evacuate the country and are still struggling to return to their homes. The restrictions have only made it tougher for citizens to return to Ukraine.
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Increased interest in crypto
The restrictions from the National Bank of Ukraine have now increased interest in cryptocurrencies.
Mikhail Chobanyan, founder of Ukrainian crypto exchange Kuna in a recent interview with crypto news outlet Forlog stated,
We expect an increase in turnover and use of cryptocurrency. In Europe, 100,000 hryvnias is nothing,” added the entrepreneur.
Chobanyan also mentioned that the imposition of the new borders has caused obstacles to the work of volunteers. Most of the humanitarian aid is purchased with cards issued by Ukrainian banks owned by private individuals.
Due to the restrictions, the funds must be managed completely through crypto. Chobanyan has also called the NBU’s stance aggressive and has also warned that Ukrainian banks and the state budget will be in losses due to such a strict policy.
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Featured image from Euronews, chart from TradingView.com
