Although the FX market has been generally stable over the last month, significant volumes of foreign currency purchases by banks pursuing overseas settlements create some additional pressure. As a solution to this, Ukraine has banned Bitcoin purchases with national currency amid martial law.
The Ukrainian central bank has officially prohibited residents from acquiring bitcoin using the local fiat currency, the hryvnia (UAH), in an effort to reduce capital outflows during the martial law period.
The National Bank of Ukraine (NBU) is also restricting the volume of cryptocurrency individuals can acquire with foreign currencies underneath the new regulations – UAH 100,000 (about $3,390) every month.
Bitcoin is not the only currency subject to constraints. The NBU’s new guidelines encompass a wide range of asset acquisitions and “quasi-cash” transactions, such as the replenishment of e – wallets, brokerage or foreign exchange (FX) accounts, and the payment of traveler’s checks.
“The relevant changes will help improve the foreign exchange market, which is a necessary prerequisite for easing restrictions in the future, as well as reducing pressure on Ukraine’s international reserves,” the bank said in a statement Thursday.
The NBU stated that the measure is required because, while the FX market has been generally stable over the last month, “significant volumes” of foreign currency purchases by banks pursuing overseas settlements “create some additional pressure.”
Routine payments for goods and services made outside and locally do not fall within the new limits, according to the bank, as it attempts to prevent “quasi cash” transactions that are used to avoid NBU rules and result in “unproductive” capital outflows.
According to the bank, the amendments were approved by the Ukrainian government in an NBU board decision (read below) dated April 20, which entered into operation on the same day.
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