The National Bank of Ukraine (NBU) has taken a somewhat ambivalent attitude towards cryptocurrency. After a year of war, the BTC was converted to USD.
The Central Bank of Ukraine has voiced both advantages and disadvantages of virtual assets in a recent press release. However, the NBU is cautious about the crypto due to economic and financial issues brought about by the conflict.
In April 2022, the NBU declared a ban on citizens from buying cryptocurrencies like Bitcoin. Only foreign currency accounts are allowed to purchase the national currency, hryvnia (UAH). The financial institution also imposed a limit on monthly crypto purchases of UAH 100,000 ($3,300). Cross-border peer-to-peer transactions are also subject to restrictions.
The NBU has stated that these administrative measures are temporary. They will “gradually be weakened as the functioning of the economy and financial market of Ukraine normalizes”, according to the press release.
“The National Bank is taking part in building a system of transparent and understandable regulation, which will contribute to the development of fair and efficient circulation of virtual assets.”
The NBU believes that these restrictions are necessary to stabilize the forex market and maintain macro-economic stability. According to the regulator, transactions with cryptocurrencies may be used to bypass currency regulation, thereby leading to capital outflow from the country.
Related: Ukraine Received $70M in crypto donations from the beginning Russia Conflict
The Central Bank of Ukraine has also mentioned risks such as the substitution of the national currency and the emergence of parallel money circulation. According to the spokesperson for the NBU, these risks are particularly high during wartime and beyond the control of the regulator:
“To minimize such risks, especially during the full-scale war, the National Bank will take a strong position on preventing the narrowing of the scope of application of the hryvnia as the only legal means of payment in Ukraine.”
Despite this caution, the NBU is still optimistic about the technological innovations related to virtual assets. They say that crypto offers many benefits including easier access to financial services and competition in the area of payment services. It also promises to attract investments, donations, and other benefits.
The NBU is thus supporting the creation of “civilized conditions for the development of the virtual assets market in Ukraine”, according to the NBU press office.
The latest comments from the NBU come shortly after Yurii Boiko, Commissioner of Ukraine’s National Commission On Securities And Stock Market, declared that the war had no impact on the authority’s regulatory stance. According to the official, Ukraine has been following the footsteps of the European Union when it comes to digital asset laws.
