Ukraine has enacted new regulations prohibiting fiat currency from bolstering the crypto economy. As a result of the continuing armed conflict with Russia, the National Bank of Ukraine enacted several other laws.
NBU has now depreciated the Hryvnia by 25% against the US dollar. In addition, the bank has imposed additional restrictions on banking activities. This action of modifying the Hryvnia-to-U.S.-dollar exchange rate and placing a limit on the volume of exchanges may promote the cryptocurrency industry’s popularity.
People may decide to switch to cryptocurrencies to circumvent fiat currency limits in the future. The representative of the local crypto business in Ukraine agrees that these limits on fiat currency would assist the crypto industry.
The new laws allow banks to sell non-cash foreign currency to private persons, provided the amount has been deposited for a minimum of three months, and the contract cannot be terminated.
New constraints are temporary
Included in the limits is the replacement of the weekly withdrawal limit of 50,000 hryvnia with a maximum of 12,500 hryvnia ($340). Peer-to-peer transactions from cards issued by Ukrainian banks have also been cut from 100,000 to 30,000 hryvnia.
Even the restriction for international transactions has been set at 100,000 per month. However, the limits seem to be transitory. The governor of the NBU, Kirill Shevchenko, has said that these restrictions are transitory.
He has confirmed that all of these limitations are, in fact, exceptional measures that are necessary owing to the ongoing conflict.
All of these steps have been taken to support the functioning of the economy. These activities have had a significant influence on the Ukrainian population. Millions of Ukrainians were forced to flee the nation and continue to struggle to return to their homes. The limitations have made it more difficult for Ukrainian people to return home.
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