Ukraine’s Central Bank Puts A Hold On Electronic Cash Transfers Following Conflict With Russia

National Bank of Ukraine

As part of measures being implemented in connection with a nationwide declaration of martial law, the National Bank of Ukraine – the country’s apex bank has placed a hold on electronic transfers of money.

The action follows the recent conflict between Ukraine and Russia and a series of cyberattacks on Ukraine which the country said was initiated by Russia.

Following the national declaration, electronic money (e-money) issuers have been ordered by the National Bank of Ukraine to suspend the issuance of e-money and replenishing wallets. This came in a written order which also clearly stated that distributing e-money was off-limits.

The rule is one out of many issued by the country following its outbursts with Russia. Electronic money (e-money) as used in the order mostly refers to fiat currencies being held in digital accounts via online platforms such as Venmo and PayPal.

On Thursday, the central bank issued a statement regarding how it plans to move forward based on the circumstance. The statement includes an order to suspend the foreign exchange market, limit cash withdrawals and stop the issuance of foreign currency from retail bank accounts.

Following the development, Ukrainians have begun to turn to cryptocurrencies. According to Kuna, a Ukrainian crypto exchange platform, people are purchasing Tether’s USDT. “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”, Michael Chobanian – CEO of the platform, said.

Ukrainians are gearing to USDT because it is relatively stable compared to Bitcoin and Ether which have suffered volatility these past weeks.

In 2021, the country which has been looking to become a haven for digital currencies signed a law that opened up the way for an indigenous digital currency. The country also came to terms on what to do regarding the regulation and legalization of cryptocurrencies.

Before it was attacked by Russia, the country was looking at opening the cryptocurrency market to businesses and investors, according to Kyiv Post.