The National Bank of Ukraine has imposed new restrictions on cross-border transactions. Along these lines, the country has temporarily prohibited crypto purchases using local currency.
The ban was imposed under martial law, which has been in effect since Russia invaded Ukraine. While martial law is in effect, it is part of a larger strategy to keep capital within the borders of the country.
Individuals will now be able to purchase assets worth up to UAH 1,000,000 per month in their own foreign currency, which will be directly converted into (exchanged for) cash through quasi cash transactions, according to a statement from the National Bank of Ukraine.
Cross-border P2P transfers are subject to the same restrictions.
Payment cards issued to foreign currency accounts can be used to conduct non-cash transactions.
The bank reminded its customers that quasi-cash transactions include replenishment of electronic wallets, brokerage or forex accounts, payment of traveler’s checks, purchase of virtual assets, and so on.
Currently, the National Bank of Ukraine allows cashless transactions using payment cards issued for foreign currency bank accounts.
According to the bank, these changes will help improve the situation in the foreign exchange market, which is required for future restrictions to be eased and pressure on Ukraine’s international reserves to be reduced.
The bank confirmed that demand for foreign transactions had increased significantly as a result of the martial law, which has forced millions of civilians to flee Ukraine. The bank, on the other hand, cannot afford “unproductive capital outflows,” such as cryptocurrency investments.
The Russian invasion of Ukraine resulted in a shift in the country’s cryptocurrency scenario.
Ukraine legalized cryptocurrency last month. Ukraine has formally determined that the National Commission on Securities and the Stock Market regulates the legal status, classification, ownership, and regulations of virtual assets.
Meanwhile, since the Russian invasion, Ukraine has received over $100 million in cryptocurrency donations.
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