Banks in Ukraine Restrict Clients from Buying Bitcoin using Ukrainian hryvnia

[Darker45]

This news somehow puzzled me. It's ironic that just a few days after President Zelenskyy signed the crypto-friendly bill, On Virtual Assets, banks have now restricted clients from purchasing Bitcoin using the local currency.

It seems the order is directly coming from the country's central bank, the National Bank of Ukraine, accordingly while martial law is in place. PrivatBank, Ukraine's largest commercial bank, is one of those that implements the restriction. Accordingly, PrivatBank is trying to "keep financial stability under martial law."

I'm not sure how high the demand for crypto is in Ukraine, but is it a threat to Ukrainian hryvnia's stability? Is the demand that high that it could significantly pull hryvnia's value down?

It somehow dawned on me that governments, which are basically built on fiat, couldn't serve two masters at the same time, fiat and crypto. By fully embracing crypto, it is very possible that people will ditch their local currencies in favor of Bitcoin. In this way, the value of the currency as well as the economy is affected. Is this the case with Ukraine?

1. https://cointelegraph.com/news/ukraine-s-largest-savings-bank-halts-bitcoin-buys-with-hryvnia-report

[rat03gopoh]

I guess the reason is obvious,

Accordingly, PrivatBank is trying to "keep financial stability under martial law."

perhaps because PrivateBank don't want more UAH supplies to flow to overseas services in the midst of a crisis and hope other local banks will take similar steps as a more significant precaution. The latest government policy will generate enthusiasm for Ukrainian citizens to buy bitcoin anywhere including on global exchanges.

[Despairo]

How it can affected hryvnia's price if the Ukraine's store didn't yet accept Bitcoin as alternative payment? President Zelenskyy not make Bitcoin as legal tender, so I doubt their citizens will use Bitcoin as a currency since most people buy Bitcoin is for investment asset. Hryvnia's price wouldn't automatically decrease when people use it to buy Bitcoin because it will make their fiat money less circulated. People will still using fiat to buy anything, the value will decrease when government print of significant amount of hryvnia.

[Ozero]

How it can affected hryvnia's price if the Ukraine's store didn't yet accept Bitcoin as alternative payment? President Zelenskyy not make Bitcoin as legal tender, so I doubt their citizens will use Bitcoin as a currency since most people buy Bitcoin is for investment asset. Hryvnia's price wouldn't automatically decrease when people use it to buy Bitcoin because it will make their fiat money less circulated. People will still using fiat to buy anything, the value will decrease when government print of significant amount of hryvnia.

In my opinion, the law on virtual assets adopted in Ukraine allows the use of cryptocurrency as a means of payment on the territory of Ukraine.
Thus, Article 1 of this law defines the concept of a virtual asset as follows:
virtual asset - a particular type of lane, which is valuable in electronic form, used in the system of virtual assets, which can be found in civil society.
Article 9 of this law provides for the following rights when using a virtual asset:
Participants in the virtual asset market have the right to:
 1) independently collect a counterparty among participants in the virtual assets market for the purpose of conducting transactions with virtual assets;
 2) take into account the post-chief services involved in the total number of virtual assets necessary, available and reliable information about such post-chief services, the rules of yoga work, the judicious transfer of minds of his operations, as well as the manifest abilities for him
 3) on the basis of the quality of servants, connected with the total number of virtual assets;
 4) vidkrivati and vikoristovuvati for zdiysnennya operations z virtual assets rahunka in banking and other financial institutions;
 5) on the judicial and other ways to defend their rights to virtual assets, both from the side of the state, and from the side of other participants in the virtual assets market;
 6) for the withdrawal of their personal data in accordance with the procedure established by the Law of Ukraine "On the withdrawal of personal data";
 7) independently collect the values ​​of virtual assets, for which operations are carried out with them.

Thus, the cryptocurrency in Ukraine has the right to fully walk in society along with other means of payment.

[KaliLinux]

How it can affected hryvnia's price if the Ukraine's store didn't yet accept Bitcoin as alternative payment? President Zelenskyy not make Bitcoin as legal tender, so I doubt their citizens will use Bitcoin as a currency since most people buy Bitcoin is for investment asset. Hryvnia's price wouldn't automatically decrease when people use it to buy Bitcoin because it will make their fiat money less circulated. People will still using fiat to buy anything, the value will decrease when government print of significant amount of hryvnia.

I agree. I believe buying Bitcoin by Ukrainians will not directly affect the price of hryvnia but I presume that with the current situation in Ukraine (the war), they would rather have the money within the country remain in circulation for easier access instead of putting it into Bitcoin investment but not because they are against Bitcoin investment also.

[hugeblack]

I do not see a contradiction in the news, especially with the application of martial law. Governments may restrict some laws but if we go back to the reason for legalizing cryptocurrencies, which is that the government wants more money, whether from donations or increasing people’s transfers.


That individuals do the opposite, which is selling local currency to buy bitcoin, it is something against the policy that aims to collect bitcoin and convert it into the local currency, and therefore we see that they have approved the law and restricted withdrawals (not deposits)

Overall, I don't know how these restrictions will be applied?

[teosanru]

This news somehow puzzled me. It's ironic that just a few days after President Zelenskyy signed the crypto-friendly bill, On Virtual Assets, banks have now restricted clients from purchasing Bitcoin using the local currency.

It seems the order is directly coming from the country's central bank, the National Bank of Ukraine, accordingly while martial law is in place. PrivatBank, Ukraine's largest commercial bank, is one of those that implements the restriction. Accordingly, PrivatBank is trying to "keep financial stability under martial law."

I'm not sure how high the demand for crypto is in Ukraine, but is it a threat to Ukrainian hryvnia's stability? Is the demand that high that it could significantly pull hryvnia's value down?

It somehow dawned on me that governments, which are basically built on fiat, couldn't serve two masters at the same time, fiat and crypto. By fully embracing crypto, it is very possible that people will ditch their local currencies in favor of Bitcoin. In this way, the value of the currency as well as the economy is affected. Is this the case with Ukraine?

1. https://cointelegraph.com/news/ukraine-s-largest-savings-bank-halts-bitcoin-buys-with-hryvnia-report

I agree that in times of war banks are burdened even higher with the responsibility to maintain stability of the home currency with cut in exports/ imports, moreover if people will start using some other currency the demand of the home currency will reduce and moreover it'll be difficult to bank to maintain the total flow of money in the economy but yes it's ironic that how Government legalized it just a few days earlier and then bank starts restricting the clients.

[Cryptmuster]

This news somehow puzzled me. It's ironic that just a few days after President Zelenskyy signed the crypto-friendly bill, On Virtual Assets, banks have now restricted clients from purchasing Bitcoin using the local currency.

It seems the order is directly coming from the country's central bank, the National Bank of Ukraine, accordingly while martial law is in place. PrivatBank, Ukraine's largest commercial bank, is one of those that implements the restriction. Accordingly, PrivatBank is trying to "keep financial stability under martial law."

Perhaps after the adoption of the law, banks expected that there would be many people who wanted to buy cryptocurrency, but I'm not sure about this. After all, a person who wants to buy bitcoin can do this without any problems through exchangers and before the adoption of this law. So I doubt very much that this law is capable of greatly influencing the desire of people to massively buy cryptocurrency now.

[fzkto]

The exact same scenario happened in Russia recently when the Central Bank spoke out about banning cryptocurrencies in the country. This must be a headache for all banks, because people become financially independent from banks by using cryptocurrency. I know that the crypto-community was well organized in Ukraine, and there was a concentration of different projects and specialists. But with the war, the law on digital assets may have been poorly organised and may need to be refined. In any case, banks will always fight cryptocurrencies.

[kryptqnick]

I think this news is just incorrect. I followed the link that Cointelegraph stated as a source, and there are updates to the article there, where the founder of Kuna (Ukrainian crypto exchange) said the limits didn't affect Ukrainian crypto exchanges, and another Ukrainian crypto exchange WhiteBIT said the same thing. Moreover, I couldn't find any actual proof of this being the case (no official statements from Privatbank, and pretty much no news apart from a weird Forklog claiming that that's what Privatbank told them). And even if Privatbank did tell them that, it's one bank, not "banks in Ukraine". Overall, it just clearly needs more clarification and proof, I believe. There's clearly something with Binance and hryvnia, but I know if it's more than that.

[Darker45]

I think this news is just incorrect. I followed the link that Cointelegraph stated as a source, and there are updates to the article there, where the founder of Kuna (Ukrainian crypto exchange) said the limits didn't affect Ukrainian crypto exchanges, and another Ukrainian crypto exchange WhiteBIT said the same thing. Moreover, I couldn't find any actual proof of this being the case (no official statements from Privatbank, and pretty much no news apart from a weird Forklog claiming that that's what Privatbank told them). And even if Privatbank did tell them that, it's one bank, not "banks in Ukraine". Overall, it just clearly needs more clarification and proof, I believe. There's clearly something with Binance and hryvnia, but I know if it's more than that.

Yeah, it was a little bit confusing. Binance Ukraine made the announcement through a social media post, and yet Kuna has also claimed that "everything works as usual." I am now doubting whether the said Binance Ukraine account, which was cited by CoinTelegraph, was official. ForkLog's update mentioned that "Binance representatives told ForkLog that PrivatBank did not notify them about the blocking of hryvnia input to the exchange, however, users 'are experiencing problems with such transactions.'"^[1]

The tweet mentioned in the CoinTelegraph article also claimed that Privatbank is failing them. There was a reply mentioning that their "bank account connected to Localbitcoins" was also blocked.^[2]

Comments on Binance Ukraine's announcement also mentioned that both Monobank and Sportbank were also down, presumably pertaining to their Binance-related transactions. But it seems a Monobank transaction with another exchange is working well. However, a user has also shared that his purchase of a cryptocurrency card wasn't approved by Monobank.^[3]

I am now beginning to think that these glitches have nothing to do with crypto but with the current resolution by the National Bank of Ukraine on cross-border transactions and withdrawal limits while martial law is in place.

[1] https://forklog.com/v-privatbanke-vremenno-zapretili-zavodit-grivny-na-bitkoin-birzhi/
[2] https://twitter.com/claberus/status/1497525321444339713
[3] https://www.facebook.com/BinanceUkraine/posts/825856065476808

[hatshepsut93]

In the first days of martial law Ukrainian regulator blocked purchase of foreign currency to somewhat stabilize the national currency, so attempts to stop purchase of crypto is a logical continuation of that. You could argue that this is useless, that there will be a black market, that inflation will catch up anyway, but for Ukraine every second matters because it is currently in a very hot war phase.

[Woodie]

But why would they restrict their clients from purchasing whatever they desire?? Could the Ukrainian government  see buying bitcoin as an indirect way of supporting Russia who could be turning to crypto as a way of evading their financial sanctions or something  

I hope the government rescinds its decision to accord the people the freedom they have been enjoying.

[galambo]

But why would they restrict their clients from purchasing whatever they desire?? Could the Ukrainian government  see buying bitcoin as an indirect way of supporting Russia who could be turning to crypto as a way of evading their financial sanctions or something  

I hope the government rescinds its decision to accord the people the freedom they have been enjoying.

Governments don't have favorable policies when it comes to crypto. Ukarine is now at war and the main reason in my view is that Ukarine government don't wanna see money slipping out of the country without notice of government. As far as Russia is concerned, I don't think sanctions have much impact on them since Europe and other countries are still buying oil and gas from Russia.

[darkangel11]

I'm not sure how high the demand for crypto is in Ukraine, but is it a threat to Ukrainian hryvnia's stability? Is the demand that high that it could significantly pull hryvnia's value down?

The biggest threat to hryvnia's stability is Russians bombing the shit out of every shopping center and warehouse because "nazis". I don't think it can really get worse than this for Ukrainian fiat currency. Saying that they're afraid that Bitcoin could make it unstable sounds like something a bunch of comedians would say, but the president is somehow not involved. iT already is unstable and there's probably nothing worse for a national currency than a threat that the country could cease to exist and become a part of the invader's land.

Trading seems to have picked up the pace.

According to trading data from Binance, which is the only major international exchange that deals with both the Russian ruble and the Ukrainian hryvnia, volume in the USDT/UAH pair saw a significant jump on Wednesday this week, 20 days after the war started.
The 24-hour trading volume in USDT/UAH reached USDT 9.83m on Wednesday, well above the USDT 8.69m seen on February 24, the day Russian forces first attacked Ukraine.
https://cryptonews.com/news/tether-trading-volume-ukraine-rises-again-russian-volume-down.htm

[Erumo]

I've read that more than 3 million refugees has left Ukraine since February 24. Imagine how much cash and money they have move outside Ukraine. This might look like reality just a little, but maybe Ukraine wants to stop cash and money flows from country. Maybe Ukrainian financial ministry try to stop replacement of national currency with Bitcoin. They dont want to be in situation, when Bitcoin (highly volatile crypto) becomes only acceptable currency.

[NotATether]

This news somehow puzzled me. It's ironic that just a few days after President Zelenskyy signed the crypto-friendly bill, On Virtual Assets, banks have now restricted clients from purchasing Bitcoin using the local currency.

It was most likely done to prevent the exiting of too much hard currency from the country. Remember that perhaps wealthy Russian oligarchs who happen to be living in the region could be trying to withdraw all of their money in an attempt to make the banks go bust, to hurt civilians - and to a limited extent the government - more.

I've read that more than 3 million refugees has left Ukraine since February 24. Imagine how much cash and money they have move outside Ukraine. This might look like reality just a little, but maybe Ukraine wants to stop cash and money flows from country.

Definitely.

I hope the government rescinds its decision to accord the people the freedom they have been enjoying.

Erm... most of these people define freedom as having their running water, food supplies, and electricity without Russian soldiers squatting on their land, not as having the ability to use crypto!

[pooya87]

Erm... most of these people define freedom as having their running water, food supplies, and electricity without Russian soldiers squatting on their land, not as having the ability to use crypto!

Actually most people don't understand the concept of freedom. For them they are free as long as they are told they are free even if they are in chains! The reason why they are feeling trapped today is because there is obvious hostility involved whereas for the past decade Ukraine was occupied without them knowing it. Otherwise why were they ignoring the fact that US had bioterrorism bases in their country? And that's just the tip of the iceberg.

[Kakmakr]

It just shows you that the Banks care more about the hryvnia's stability than preserving the value of the wealth of the people. They do not even care that millions of Dollars are being donated via Crypto currencies and eventually converted into their local currency. 

The impact of the war on their economy are much more damaging to the stability of their economy and the stability of their Fiat currency, so they should rather focus on getting a solution for that. 

[romero121]

With the ongoing war most of the tech companies based in Russia have closed its operations. This is supposed to move to different locations around the globe. As of now it is predicted that the move could be towards India. Same as this Ukraine people have lost jobs out of the war. As a result works towards the Ukraine Centers were redirected towards India. This could give job opportunities to Indians, and more such incidents altogether cause fall of economy. Just to focus on recovering the economy banks have taken such measures amidst the legalizing from the government.