New Fiat Restrictions in Ukraine Are Likely to Increase Crypto Popularity

New Fiat Restrictions in Ukraine Are Likely to Increase Crypto Popularity

The Central Bank of Ukraine has fixed the exchange rate of the national currency in U.S. dollars and introduced stricter limits on hryvnia transactions for citizens. The measures are likely to lead more Ukrainians to use cryptocurrencies, reports a representative of the local crypto sector.

War-Time Hryvnia Limits to Boost Interest in Crypto

The National Bank of Ukraine (NBU) has introduced new rules in response to the changing fundamentals of the economy during an ongoing military conflict with Russia. The central bank devalued the Ukrainian hryvnia against the strong U.S. dollar by 25% on Thursday and set new limits on banking operations with the national fiat.

The updated regulations for private individuals, enforced on July 21, state that banks can sell non-cash foreign currency to their customers only if the amounts are deposited for at least three months without an option to terminate the contract.

The 50,000-hryvnia ceiling for withdrawals from payment cards has now been substituted with a weekly limit of 12,500 (USD 340). Peer-to-peer transfers abroad from cards issued by Ukrainian banks have been cut from 100,000 hryvnias (approx. USD 2,700) to 30,000 hryvnias (USD 800). And the limit for cross-border settlements with hryvnia cards has been set at 100,000 per month.

All the measures introduced since the beginning of the war are temporary and allow the economy to survive, assured NBU Governor Kirill Shevchenko. But they are seriously affecting Ukrainians, especially those millions of citizens who have been forced to leave the country and are unable to return.

The latest NBU restrictions may lead to a surge in Ukrainians’ interest in cryptocurrencies, the founder of the Ukrainian crypto exchange Kuna, Mikhail Chobanyan, commented to 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 also noted that the new limits will hinder the work of volunteers since most of the humanitarian assistance is purchased with cards issued by Ukrainian banks and owned by individuals. "Now we will completely switch these flows to crypto," said Chobanyan, who described the policy of the Central Bank as aggressive and warned that Ukrainian banks and the state budget will be the biggest losers.