Ukraine imposes new rules for fiat usage as it wants to boost crypto use in the country. The National Bank of Ukraine went as far as to introduce rules in order to control the current financial state during the Russia-Ukraine war. They have inflated their fiat currency, Hryvnia, by 25% against USD and have limited the banking functions. In fact, there is also a limit to how much Hryvnia citizens can exchange with the US dollar at once.
New fiat laws in Ukraine and their implications
Right now, the restrictions could push Ukrainian citizens to choose crypto over fiat. These will help them bypass the restrictions introduced by the authorities. The crypto industry there also thinks it will be beneficial for them. However, do note that these laws are temporary. Right now, there is a weekly limit on withdrawals due to the war. But this will not last forever, and nor will the laws.
Weekly withdrawal limits stand at 12,500 Hryvnia ($340), and the limit on p2p transfer from cards has been reduced from 100,000 to 30,000. At the same time, there is also a limit on the cross-border settlement at 100,000 Hryvnia or $2720. The governor of the National Bank of Ukraine, Kirill Shevchenko, said that the restrictions are temporary in nature. As I said above, these restrictions are in place so that Ukraine’s economy survives the current impact of the war.
However, for citizens, this could be a problem as they cannot withdraw their own money. So, the interest in cryptocurrency has been increasing. Since the limits are so less, crypto could be used for cross-border payments. It could also become the medium for transactions for volunteers.
Crypto’s real benefit
Due to the Russia-Ukraine war, the country’s banking infrastructure has been restricted, and so many limits are being put on transactions. Citizens cannot spend or withdraw their own money even if it is in their bank. Crypto solves this as no one can control your funds. If you have a hardware wallet, you will have complete control over it. However, the case is different if you store your coins on a centralized platform.
What are your thoughts as Ukraine imposes new rules for fiat usage? And do you think it will increase the use of cryptocurrency in the country? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.