Ukraine imposed a ban on Bitcoin (BTC) purchases using the local fiat currency, Hryvnia. According to the National Bank of Ukraine, the country’s central bank, they have set a number of new restrictions when it comes to crypto payments and purchases. This comes as there has been a strong interest from people in the country to sell their local currency for Bitcoin or other virtual currencies. Some of these funds were then sent abroad.
Ukraine Banks Bitcoin and Crypto Purchases Using Hryvnia
With the ongoing war, the National Bank of Ukraine restricted crypto and Bitcoin purchases using Hryvnia. The measure has been implemented in order to stop the outflow of money from the country. Despite the fact that the ban is temporary, it is already affecting users that were purchasing digital currencies on a regular basis.
According to Ukraine’s central bank, more than $1.7 billion have been transferred abroad from Ukrainian banks. The only way in which Ukrainians can purchase virtual currencies right now is using foreign currencies. The monthly limit is capped at $3,300 per person.
In the statement, the National Bank of Ukraine informed:
“The National Bank of Ukraine estimates that said changes will improve conditions on the foreign exchange market, which is a prerequisite for further easing the restrictions and relieving pressure on Ukraine’s international reserves.”
Bitcoin and other virtual currencies have been used over the last years by people from all over the world to bypass restrictions that involved capital controls. Different countries have applied restrictions to crypto and foreign currency purchases in recent years due to a large variety of reasons.
This comes after Ukraine showed a strong approach toward crypto adoption in the country. In February, Ukraine legalized virtual currencies and during the first days of the war, the country received millions of donations in Bitcoin and other virtual currencies. As reported in the past by UseTheBitcoin, Bitcoin and crypto donations to Ukraine surpassed $50 million in just 2 days of the war.
This shows that the decision to ban crypto purchases with local currency comes at a moment in which there is strong pressure on the Hryvnia.
Let’s not forget that the war in Ukraine is becoming extremely costly for both sides. Ukraine continues to receive credit from other countries, but the local currency seems to have devalued further as military expenditures continue growing.
At the time of writing this article, Bitcoin is being traded for close to $39,640 and it has a market capitalization of $753 billion. In the last 24 hours, Bitcoin fell by 2.4%.