Ukraine prohibits Bitcoin purchases with national currency

  • Ukraine’s central bank has banned bitcoin purchases with the national fiat currency.
  • The bank said the move was aimed at preventing “unproductive” capital outflows in a bid to safeguard the health of the country’s foreign exchange market.
  • In addition to cryptocurrency purchases, the new rules also target e-wallet deposits, foreign exchange transactions and travel payments.

Ukraine’s central bank now prohibits citizens from buying bitcoin with the local fiat currency, the hryvnia (UAH), as it attempts to curb capital outflows under martial law.

Under the new rules, the National Bank of Ukraine (NBU) also limits the amount of cryptocurrency people can buy with foreign currency – the equivalent of 100,000 UAH (about $3,390) per month.

Restrictions are not exclusive to Bitcoin. The new guidelines imposed by the NBU cover a slew of asset purchases and “near cash” transactions, including replenishing e-wallets, brokerage or foreign exchange (FX) accounts and paying travelers checks.

“The relevant changes will help improve the foreign exchange market, which is a necessary precondition for easing restrictions in the future, as well as reduce pressure on Ukraine’s international reserves,” the bank said in a statement. statement Thursday.

The NBU said the move was necessary because even though the foreign exchange market has been broadly balanced over the past month, “large volumes” of foreign currency purchases by banks seeking international settlements “create pressure additional”.

Regular payments abroad and locally for goods and services do not fall under new restrictions, the bank added, as it seeks to limit “near-cash” transactions that are used to circumvent restrictions imposed by the NBU and lead to “unproductive” capital. exits.

The bank said the Ukrainian government adopted the changes in an April 20 NBU board resolution, which took effect the same day.

— With the help of Alyona Nevmerzhytska.