MicroStrategy's Significant Bitcoin Impairment Losses May Mislead: Berenberg

Turkish Crypto Exchange Thodex CEO Faruk Özer Sentenced to 11,196 Years in Prison for Collapse

DeFi and Credit Risk

Citizens of Ukraine are not permitted to purchase cryptocurrency outside of Ukraine using local currency accounts

The National Bank of Ukraine (NBU) has issued a notification outlining the imposition of various restrictions on private people' cross-border transactions. The action attempts to stem the “unproductive outflow of wealth from the country under martial law,” the regulator claimed.

Residents of Ukraine will be able to purchase assets that can be directly converted to cash, or quasi-cash transactions, using just their own foreign money up to a monthly limit of 100,000 hryvnia ($3,400). Cross-border peer-to-peer (P2P) transmissions are also subject to the limit. These non-cash transfers can be made with cards issued to foreign currency accounts.

The monetary authority defined quasi cash transactions as "a spectrum of operations such as refilling of electronic wallets or FX accounts, payment of traveler's checks, and purchase of virtual assets." The new rules follow the suspension of hryvnia payments to cryptocurrency exchanges by Ukraine's largest commercial bank, Privatbank, in March.

The NBU authorizes Hryvnia account holders to conduct cross-border P2P payments within the 100,000-hryvnia monthly limit in order to promote financial support for Ukrainian refugees overseas. However, the central bank stressed that quasi-cash transactions in national currency from these accounts are temporarily barred.

The National Bank of Ukraine argues that these measures will aid in the improvement of the country's foreign exchange market, which it views as a prerequisite for future limitations being eased. The regulator is also confident that the measures will alleviate the strain on Ukraine's foreign exchange reserves.

Significant quantities of foreign currency purchases by local banks for settlement with international payment systems have been processed on the Ukrainian foreign exchange market. In March, such transfers totaled $1.7 billion. The rising use of cards issued by Ukrainian banks linked to accounts in national currency for the purchase of goods and services outside the country has fueled demand for these settlements.

Bank cards are also used in quasi-cash transactions, according to the NBU, which are mostly used to get over the NBU's regulations, such as investing abroad, which is illegal under the current martial law. However, the bank emphasizes that the new restrictions do not apply to the usage of cards to pay for products and services both inside and outside Ukraine.

======