Tuesday, January 31, 2023
  • The Ukrainian central bank has banned bitcoin purchases with the national fiat currency.
  • The bank said the move seeks to prevent “unproductive” capital outflows in a bid to preserve the health of the country’s FX market.
  • In addition to cryptocurrency buys, the new rules also target electronic wallet deposits, FX transactions and travel payments.

The Ukrainian central bank has now prohibited residents from acquiring bitcoin using the country’s fiat currency, the hryvnia (UAH), as part of its ongoing efforts to stem capital outflows under the country’s state of emergency.

The National Bank of Ukraine (NBU) is also restricting the amount of cryptocurrencies that consumers may purchase using foreign currencies, limiting them to an equivalent of UAH 100,000 (about $3,390) every month under the new guidelines.

Bitcoin is not the only cryptocurrency subject to these limitations. The National Bank of Ukraine has issued new guidelines for a wide range of asset purchases and “quasi-cash” transactions, including the replenishment of electronic wallets, the opening of brokerage or foreign exchange (FX) accounts, and the payment of traveler’s checks.

It stated in a statement on Thursday that “the relevant modifications would contribute to the improvement of the foreign currency market, which is a key precursor for removing restrictions in the future, as well as decreasing pressure on Ukraine’s international reserves.”

Because “large quantities” of foreign currency purchases by banks seeking overseas settlements “provide some extra pressure,” according to the NBU, despite the fact that the foreign exchange market has been mainly balanced over the last month.

In addition, the bank stated that regular payments for goods and services made abroad and locally do not fall under the purview of the new restrictions, which are intended to limit “quasi cash” transactions that are used to circumvent restrictions imposed by the NBU and result in “unproductive” capital outflows from the country.

According to the bank, the Ukrainian government approved the adjustments in a National Bank of Ukraine board decision dated April 20, which took effect on the same day. Ukraine prohibits the purchase of bitcoins

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