Ukrainian Central Bank Suspends Electronic Transfers, Bolstering Use Case Of Crypto

February 25, 2022 4:53 pm

The central bank of Ukraine is now suspending the issuance of electronic money as one of the recent results due to the country’s recent declaration of martial law.

Essentially, users will not be able to distribute electronic or digital money in fiat currencies which also include services such as Paypal or Venmo.

In addition to that, the country also declared the suspension of many other critical financial services such as the foreign exchange market and is limiting cash withdrawals.

As a result of all these new restrictions and limitations, many Ukraine citizens are looking for new ways to protect and preserve their assets such as the use of cryptocurrencies.

CNBC reports:

The National Bank of Ukraine released a statement on Thursday with a spate of resolutions, including an order to suspend the foreign exchange market, limit cash withdrawals, and prohibit the issuance of foreign currency from retail bank accounts.

As Ukraine cracks down on pathways to cash and Moscow unleashes airstrikes and ground troops, some Ukrainians are instead turning to cryptocurrencies.

Kuna, a popular Ukrainian crypto exchange, shows that domestic buyers are paying a premium for Tether’s USDT stablecoin, which is pegged to the price of the U.S. dollar.

“We don’t trust the government. We don’t trust the banking system. We don’t trust the local currency,” said Michael Chobanian, the founder of Kuna, in an interview with Coindesk.

“The majority of people have nothing else to choose apart from crypto.”

As of right now, the most popular stable coin is still considered Tether which currently has a market cap of nearly $80 billion and is used to store assets within the crypto ecosystem while reducing risk to the market.

However, due to recent events in Ukraine, it was reported that the demand for Tether increased dramatically where it was recorded that the price went up to around $1.10 when it is typically $1.

The country is already one of the most open societies when it comes to embracing the use of crypto and it was recently recorded that the country actually trades crypto more than fiat currencies.

Back in 2021, the president of Ukraine had actually signed a law that would help the country create its own digital currency to be used by the central bank.

PehalNews reports:

On an official state go to to the U.S. in August 2021, Zelenskyy spoke of Ukraine’s budding “legal innovative market for virtual assets” as a promoting level for funding, and Minister of Digital Transformation Mykhailo Fedorov mentioned the nation was modernizing its fee market in order that its nationwide bank would be capable of problem digital foreign money.

Prior to the Russian assault, Ukraine had plans to open the cryptocurrency market to companies and traders, based on the Kyiv Post.

Top state officers have additionally been touting their crypto avenue cred to traders and enterprise capital funds in Silicon Valley — however the Russian invasion has pulled focus from these efforts.

As more and more events continue to unfold around the world, it seems that the use of crypto will continue to go up.

Investors are optimistic that the cryptocurrency market may one day become uncorrelated from traditional financial markets once the mainstream sees the potential to use it to have complete ownership of their own financial assets.

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