Two months after Russia’s invasion, Ukraine has banned purchases in local currency of assets that can be directly converted to cash, including cryptocurrencies, to reduce capital outflow under martial law.
Individuals are allowed to conduct “quasi cash transactions” only using foreign currencies, with a cap of 100,000 Ukraine hryvnia, or about $3,404 per month, the National Bank of Ukraine said in a statement on Thursday.
The country’s central bank referred to “quasi cash transactions” as purchases of virtual assets and traveler’s checks, and deposits to electronic wallets, brokerage or forex accounts, according to a translation of the statement.
The move aims to “prevent unproductive capital outflow” and “reduce pressure on Ukraine’s international reserves,” while the restriction does not apply to payments of goods and services, according to the statement.
Cryptocurrencies’ role has been highlighted during the Russia-Ukraine war. In response to new sanction measures levied by the European Union, Binance Holdings, the world’s largest crypto exchange, said Thursday that it will curb services to Russian residents and businesses in the country with crypto assets exceeding value of 10,000 euros, or $10,803. There has been speculation that Russians may use cryptocurrencies to evade sanctions by western countries.