Amid War, Ukraine Central Bank Suspends Use of Electronic Money, Caps Cash Withdrawals
Rattled by the Russian invasion and declaration of war, Ukraine¡¯s central bank has suspended digital money transfers and limited cash withdrawals.
Rattled by the Russian invasion and declaration of war, Ukraine¡¯s central bank is cracking down on digital money transfers and capping cash withdrawals. These are amongst the latest measures implemented in connection with a nationwide declaration of martial law.
For the uninitiated, martial law is a measure usually accompanied by curfews, the suspension of civil law, and the application or extension of military law and justice to civilians. When martial law is invoked, military officials and not civilian leaders make and apply the law. This means that Ukrainian soldiers, not police, are responsible for enforcing laws, as per Al Jazeera.
The Central Bank¡¯s Order
centralbanking
Yesterday, the National Bank of Ukraine released a statement with a spate of resolutions, including an order to suspend the foreign exchange market, limit cash withdrawals, and prohibit the issuance of foreign currency from retail bank accounts.
The Central Bank has ordered electronic money issuers to suspend its issuance and the replenishment of electronic wallets with e-money. The written order by the Central bank also indicated that the distribution of e-money was temporarily off-limits.
As per CNBC, the reference to electronic money here likely refers to fiat currencies held in digital accounts through platforms like Venmo or PayPal.
And as citizens lined up at Ukraine¡¯s ATMs and bank offices, the Central Bank adopted a resolution to limit the daily cash withdrawals in local currency to 100,000 hryvnias (approximately $3,350), excluding wages and social payments. The National Bank of Ukraine prohibited the release of cash funds from accounts in foreign currency as well.
Following the imposition of martial law by the Ukrainian President, the Central bank has insisted that banks should continue to operate but with the adopted restrictions.
Ukrainians Turning To Crypto?
As Ukraine cracks down on pathways to cash and digital money, some Ukrainians are instead turning to cryptocurrencies, as per CNBC.
Kuna, a popular Ukrainian crypto exchange, shows that domestic buyers are paying a premium for Tether¡¯s USDT stablecoin, which is pegged to the price of the U.S. dollar.
The founder of the crypto exchange said in an interview with Coindesk ¡°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.¡±
According to CNBC, Tether is the most popular stablecoin by market cap at nearly $80 billion, and unlike most other cryptocurrencies, tether, like other stablecoins of its kind, has generally been pretty stable in value.
For more of such the latest financial news, keep reading Worth. Click here