Ukraine’s central bank bans purchasing cryptocurrency using local currency

Ukraine’s central bank has banned the purchase of cryptocurrencies using the country’s local currency, invoking martial law, which has been in effect since the invasion by Russia.

The National Union Bank of Ukraine (NBU) has introduced several measures to reduce capital outflows, including banning the purchase of cryptocurrency with local currency.

Due to Russia’s invasion, the need for international transactions has increased significantly.

In an official statement by the Ukrainian central bank on April 21, several cross-border operations are restricted. Moreover, individuals are prohibited from purchasing cryptocurrencies such as Bitcoin using the national fiat currency, Hryvnia.

Ukrainians can only purchase cryptocurrencies with foreign currencies under the new rules up to a maximum limit of 100,000 hryvnias ($3,300). The limitation also applies to international peer-to-peer transactions.

The National Bank of Ukraine said:

“From now on, individuals will be able to use their own foreign currency to purchase a monthly equivalent of up to 100,000 hryvnias in assets that are directly converted into (exchanged for) cash through transactions classified as quasi cash.   The respective limit also applies to cross-border P2P transfers.”

The move is surprising considering the Ukrainian government recently officially legalized cryptocurrencies after  President Zelenskyy signed a new bill on virtual assets into law on March 16.

In recent weeks, Ukraine and many charities associated with Ukraine have raised millions in crypto from all types of donations, including around $5.7 million in DOT from Gavin Wood and over $600,000 via NFT sales to help rebuild cultural sites in Ukraine. Kraken promised to donate over $10 million worth of aid from fees generated from Russian transactions to Ukraine.

Ukraine ranked fourth in terms of cryptocurrency adoption across the globe at the end of 2021, according to Chainalysis data.