• The National Bank of Ukraine (NBU) has expressed a mixed stance on cryptocurrencies such as Bitcoin (BTC). They see both good and bad in digital assets, taking a more skeptical approach due to financial and economic issues caused by the invasion.
• In April 2022, the NBU prohibited citizens from buying cryptocurrencies like Bitcoin using the national currency, the hryvnia (UAH), only allowing such purchases via foreign currency accounts.
• The administrative restrictions involving operations with cryptocurrencies in Ukraine are temporary, but they are necessary for Ukraine in order to stabilize the situation in the foreign exchange market and preserve macro-financial stability.
Ukraine’s Central Bank Sees Promises and Threats in Bitcoin
The National Bank of Ukraine (NBU) has expressed a mixed stance on cryptocurrencies such as Bitcoin (BTC). On one hand, they see potential benefits for better payments; however, they also view crypto as a threat to macro-financial stability.
Crypto Restrictions Set by NBU
In April 2022, the NBU imposed restrictions on purchasing cryptocurrency with the national currency – hryvnia (UAH). This type of purchase is only allowed via foreign currency accounts with a monthly limit of 100,000 UAH ($3,300). Moreover, cross-border peer-to-peer transactions also fall under these restrictions.
Temporary Nature of Restrictions
The administrative restrictions set by NBU are not permanent; instead they are meant to be gradually weakened as “the functioning of economy and financial market of Ukraine normalizes”. The main purpose behind them was stabilizing the situation in the foreign exchange market and preserving macro-financial stability.
Risks Involved With Cryptocurrencies
According to NBU spokesperson there are risks involved with transactions made using virtual currencies – these can be used to bypass currency regulation or cause unproductive capital outflow from Ukraine which poses threats to its monetary sovereignty. This risk is especially high during war times when it is beyond effective control of regulators.
Conclusion
Despite some risks posed by cryptocurrency usage in Ukraine, it still offers promising opportunities for better payments through transparent and understandable regulations which will contribute to efficient circulation of virtual assets.