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One of the most recent steps adopted in line with a statewide proclamation of martial rule is a crackdown on digital money transactions by Ukraine's central bank.
The National Bank of Ukraine has instructed electronic money (e-money) issuers to halt e-money issuance and e-money replenishment of electronic wallets. The written ruling further said that e-money distribution was temporarily prohibited.
The term "electronic money" most likely refers to fiat currency maintained in digital accounts through services such as Venmo or PayPal.
This is one of many new limitations imposed by the country's central bank as Russian armies lay siege to Ukraine.
The National Bank of Ukraine issued a statement on Thursday that included a number of decisions, including an order to stop the foreign exchange market, restrict cash withdrawals, and prevent the issuing of foreign currency from ordinary bank accounts.
As Ukraine tightens restrictions on cash-transfer routes and Moscow unleashes airstrikes and ground forces, some Ukrainians are turning to cryptocurrency.
According to Kuna, a major Ukrainian cryptocurrency exchange, local purchasers are paying a premium for Tether's USDT stablecoin, which is tethered to the value of the US dollar.
"We don't have faith in the government." We don't have faith in the financial system. In an interview with Coindesk, Michael Chobanian, the creator of Kuna, said, "We don't trust the local currency." "The vast majority of individuals have no other option than to invest in cryptocurrency."
Tether is the most popular stablecoin by market cap, with about $80 billion, and unlike cryptocurrencies like bitcoin and ethereum, which have seen significant volatility in recent weeks due to rising geopolitical tensions, tether, like other stablecoins, is normally very stable in value.
However, because to growing demand, the current exchange rate for 1 USDT is around 32 Ukrainian hryvnia (the national currency), or $1.10.
Ukraine's officials have been working for months to promote the country as a digital currency haven.
In 2021, Ukrainian President Volodymyr Zelenskyy approved legislation allowing the country's central bank to create its own digital currency, and the president and parliament just agreed on legislation to legalize and regulate cryptocurrencies.
During an official state visit to the United States in August 2021, Zelenskyy touted Ukraine's emerging "legal innovative market for virtual assets" as a selling point for investment, while Minister of Digital Transformation Mykhailo Fedorov stated that the country was modernizing its payments market so that its national bank could issue digital currency.
According to the Kyiv Post, Ukraine had planned to open the bitcoin market to companies and investors before to the Russian invasion. Top state officials have also been selling their crypto street cred to Silicon Valley investors and venture capital firms, but the Russian incursion has diverted attention away from these efforts.
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