The National Bank of Ukraine (NBU) has expressed a mixed stance on cryptocurrencies such as Bitcoin (BTC) after a year of war in the country.
Ukraine’s central bank sees both good and bad in virtual assets, taking a more skeptical approach towards cryptocurrencies due to financial and economic problems caused by the invasionaccording to the NBU press office.
In April 2022, the NBU banned citizens from buying cryptocurrencies like Bitcoin using the national currency, the hryvnia (UAH), only allowing such purchases through foreign currency accounts. The central bank also set a monthly limit on such purchases, prohibiting Ukrainians from buying more than 100,000 UAH ($3,300) worth of cryptocurrency per month.. The restrictions also apply to cross-border peer-to-peer transactions.
Administrative restrictions involving cryptocurrency operations in Ukraine are temporary, an NBU press officer told Cointelegraph on March 9. The limits will be “gradually weakened as the functioning of the Ukrainian economy and financial market normalizes,” the NBU said, adding:
“The National Bank participates in the construction of a transparent and understandable regulation system, which will contribute to the development of a fair and efficient circulation of virtual assets.”
According to the regulator, the specified restrictions were necessary for Ukraine in order to stabilize the situation on the foreign exchange market and preserve macro-financial stability.
“Transactions with cryptocurrencies can be used to circumvent monetary regulation and, in particular, as a channel for the unproductive exit of capital from the country, which currently poses a threat to macrofinancial stability”declared the representative of the NBU.
The Ukrainian central bank also sees risks of “substitution of the national currency and the emergence of parallel currency circulation.” According to the NBU, these risks are especially high during war and are beyond the effective control of the regulator. “This can pose a threat to the monetary sovereignty of the state,” the NBU spokesman noted, adding:
“To minimize such risks, especially during large-scale war, the National Bank will take a firm position to prevent the scope of the hryvnia as the only legal means of payment in Ukraine from being reduced.”
Despite taking a cautious approach to cryptocurrencies during the war, Ukraine’s central bank remains bullish on technological innovations related to virtual assets. According to the NBU, there are many promises associated with cryptocurrencies, such as better access to financial services, competition in the field of payment services, investment attraction, crypto donations, and other benefits.
As such, the central bank supports the need to create “civilized conditions for the development of the virtual asset market in Ukraine”, stated the NBU press office.
The NBU’s latest remarks came shortly after Yurii Boiko, commissioner of the Ukrainian National Securities and Securities Commission, declared that the war had had no impact on the authority’s regulatory stance. According to the official, Ukraine has followed in the footsteps of the European Union in terms of legislation on digital assets.
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