Ukraine bans Bitcoin purchases through local currency to prevent capital flight

  • Ukraine’s central bank said on Friday that it would ban bitcoin purchases made with hyrvnia.
  • Citizens can still make purchases in foreign currency with a monthly limit of $3,300.
  • The National Bank of Ukraine has called bitcoin purchases “near-cash transactions.”

Ukraine on Friday announced limits on bitcoin purchases to protect against capital flight as Russia’s war on the country enters a third month.

The National Bank of Ukraine prohibits bitcoin purchases made with hyrvnia and caps purchases made with foreign currencies at $3,300 per month, Cointelegraph first reported.

The central bank said such measures are necessary to prevent capital outflows and reduce pressure on Ukraine’s foreign currency reserves. The NBU has also referred to bitcoin purchases as “near-cash transactions.”

The NBU is not the first institution in Ukraine to ban bitcoin purchases. PirvatBank, the country’s first commercial bank, blocked its customers from buying bitcoin with hyrvnia in March.

The move comes as Russia’s war on Ukraine has ravaged its economy. Earlier this month, the World Bank estimated that Ukraine’s GDP is set to collapse by 45% this year.

Meanwhile, Ukraine’s new crypto limits follow its earlier adoption of cryptocurrencies since the invasion of Russia, which sparked an influx of donations via digital tokens.

Ukraine has raised millions through cryptocurrency donations that have supported its war effort, raising nearly $67 million against a $200 million target set in March.

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