The measures by the Central Bank are among several implemented in connection with a nationwide declaration of martial law. Ukrainian buyers are paying a premium for Tether’s USDT Stablecoin, which is pegged to the price of the U.S. dollar.
Ukraine’s Central Bank, the National Bank of Ukraine, has cracked down on electronic money (e-money) issuers, suspending e-money or replenishing electronic wallets. The order is among the latest measures implemented in connection with a nationwide declaration of martial law. As a result of the crackdown, some Ukrainians have resorted to using cryptocurrencies instead.
Records at the leading Ukrainian local cryptocurrency exchange, Kuna, show an upsurge in domestic buyers who are paying a premium to acquire Tether’s USDT, a Stablecoin pegged to the U.S. dollar price. Michael Chobanian, the founder of Kuna, stated during an interview:
“We don’t trust the government. We don’t trust the banking system. We don’t trust the local currency […] the majority of people have nothing else to choose apart from crypto.”
Daily Cash withdrawals limited to $3,350
According to the order, the distribution of e-money was temporarily off-limits. The order on electronic money refers to fiat currencies that users hold in digital accounts via platforms such as PayPal or Venmo.
There were hoards of citizens lining up on ATMs and Bank offices Thursday as the National Bank of Ukraine (NBU) adopted a resolution limiting daily cash withdrawals in local currency to 100,000 hryvnias (approx. $3,350). The decision followed a decision by Russian President Vladimir Putin to launch a “special military operation” in Ukraine.
$400,000 worth of crypto donation in the last 24 hours
Ukraine has, for months leading to the ongoing invasion, worked hard to rebrand itself as a Mecca of cryptocurrencies. The country’s President Volodymyr Zelenskyy signed a law in 2021 that paved the way for the country’s central bank to issue its digital currency. The country’s parliament recently passed a bill to legalize and regulate cryptocurrency.
In the meantime, crypto donations to support the Ukrainian army continue to pour into the country as Russian forces continue their assault. The fundraising efforts by a local non-governmental organization, “Come Back Alive,” have netted $400,000 worth of crypto donation in the last 24 hours. A tweet by Blockchain and crypto research firm Elliptic said the average amount donated is around $1,000 to $2,000, and the group has received at least 317 individual donations in the past two days.
The Ukrainian government had plans to open the cryptocurrency market to businesses and investors, but the Russian invasion has pulled focus from these efforts. Elliptic’s head of research Jess Symington said the incoming donations “haven’t stopped,” and the firm expects the number to increase. She said pro-Ukraine groups and pro-crypto communities on social media platforms like Twitter and Facebook have contributed to the recent swell of donations.