Ukraine’s central bank bans use of UAH in crypto purchases

• The National Bank of Ukraine said the move is intended to prevent an unproductive outflow of capital.
• Crypto purchases can only be completed using foreign currency, with monthly restrictions of 100,000 Ukrainian hryvnia per individual.

Ukraine’s central bank has banned the use of the local currency hryvnia in the purchase of cryptocurrency, according to a news release on Thursday.

Per the announcement, the National Bank of Ukraine made the move as part of efforts meant to restrict the unproductive outflow of capital during this time of war.

The ban means no cross-border transactions involving citizens, a measure taken in line with martial law that has been in place since Russia’s invasion in February.

Only foreign currency

According to the central bank, those seeking to buy cryptocurrencies will only be allowed to do so using foreign currency. All crypto purchases have now been limited to UAH 100,000 (Ukrainian hryvnia) per month (roughly $3,400 as per current rates).

The National Bank has also allowed a similar amount (UAH 100,000 per month) in cross-border P2P transfers as part of supporting IDPs from Ukraine. However, the transactions must be made from bank accounts the individuals opened with the Ukrainian national currency.

As well as crypto, the bank has designated topping up of electronic wallets, forex or brokerage accounts and payment of traveller’s checks as ‘quasi cash transactions.”

The measures are also meant to bolster the foreign exchange market, the central bank said. It’s also targeted at “reducing pressure on Ukraine’s international reserves.”