Is this a good move by national bank of Ukraine

[_act_]

Ukraine bans Bitcoin purchases with local currency amid martial law

Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.

The National Bank of Ukraine (NBU) continues taking measures to prevent capital outflows amid martial law by enforcing major restrictions on cryptocurrency purchases.

The Ukrainian central bank officially announced Thursday a set of restrictions on cross-border operations, prohibiting individuals from buying cryptocurrencies like Bitcoin (BTC) with the national fiat currency, the hryvnia (UAH).

I do not check the value of hryvnia but I think the war in Ukraine would have caused persistence rise in price of goods and services in Ukraine, which means inflation. NBU restrict Hryvnia to be used to purchase bitcoin a d altcoins but allowed foreign currencies to be used. I still do not understand the reason behind this because also foreign currencies have much to contribute to inflation if its reserves are depleting.

What could be the benefit of the NBC move to allow Ukrainians to only use foreign currencies to purchase cryptocurrencies and not allowing their own local currency to be used? But I think with this, only few people will have access to foreign currencies compared to those that will have access to local currency, which means a way to reduce Ukrainians that are buying cryptocurrencies.

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[jackg]

I'd imagine this is part of a much bigger plan by Ukraine to try to prevent another party from destroying the value of their currency (at all of further).

I think it's well known that a lot of wars have used a strategy of counterfeiting currencies to try to weaken your enemy's buying power.

There's also the chance pumps and dumps could occur on the currency to try to make it's value unstable and this could've been a way to protect against that - I think a lot of Ukraine's industry is less developed though so this will probably have less of an effect on them.

It might also be a good strategy for getting citizens to value their native currency as it'll be much easier to rebuild their economy if they still have a currency they themselves can control (to set things like inflation).

[crwth]

Having a monthly capping and not using their currency means that they probably want to strengthen the power of their money. So they don't care how much of a volume that Bitcoin with the buy and sell takes place, it's all about what currency they are trading with. Maybe their value of money has diverted into something that this is one of the solutions that they could think of.

[fiulpro]

The price of UAH is going extremely up and down making the whole thing super volatile therefore The bank is trying to ban these things to prevent the engagement of people to keep the investments in the banks, but I do not think it's a good move as well since :
1. People have very limited option right now thus they need to invest in something which can provide them with profits and using third party sites might not be a good option since they are not just : expensive but also there is a matter of trust around them as well.
They also suspended e-cash transactions https://www.google.com/amp/s/www.cnbc.com/amp/2022/02/24/ukranian-bank-suspends-e-cash-transfers-bolstering-crypto-use-case.html
The move seems to be a good one for the government but undeniably its causing difficulties to the people around since cryptos are a big deal in Ukraine and people are very actively involved in buying/selling.

[stompix]

NBU restrict Hryvnia to be used to purchase bitcoin a d altcoins but allowed foreign currencies to be used. I still do not understand the reason behind this because also foreign currencies have much to contribute to inflation if its reserves are depleting.

Pretty simple, it's about controlling the currency.
If some Ukrainians already have $ them buying bitcoin will not affect the hryvnia parity at all, that is something happening outside, if, on the other hand, they buy BTC or any other thing with hryvnias that will make the currency drop, by restricting this you try to limit the damage.
Russia has gone overboard with control not allowing citizens to purchase foreign currency at all despite not being ravaged by war, and it does make sense temporarily but in the long term both a ban and a restriction will prove to be worthless, it will just make the fall harder.

That's why I've always said a country in an economic crisis will never embrace BTC, it's like you suddenly import hard currency for your useless paper, exactly why the whole Weimar Republic case is still studied, imagine doing that not to pay some debt but to completely replace your monetary mass, it's suicide.

[Moneyprism]

maybe they are doing this to protect their currency,,, because at this time their financial condition is very chaotic coupled with global inflation ... so it's only natural that the central bank of Ukraine issued a regulation like this

[_act_]

Pretty simple, it's about controlling the currency.
If some Ukrainians already have $ them buying bitcoin will not affect the hryvnia parity at all, that is something happening outside, if, on the other hand, they buy BTC or any other thing with hryvnias that will make the currency drop, by restricting this you try to limit the damage.
Russia has gone overboard with control not allowing citizens to purchase foreign currency at all despite not being ravaged by war, and it does make sense temporarily but in the long term both a ban and a restriction will prove to be worthless, it will just make the fall harder.

I will agree with you, I noticed Russia did it and in few days or weeks later, the Russian rubles increased in price. But I am still just confused, what I thought before is that a country like to protect its foreign reserves, if the people in a country are demanding more of the foreign reserve, the central bank will not have option than to decrease the price of the local currency so to protect the foreign reserve depletion, which means that would still result to inflation or devaluation of local currency. If foreign reserves are used by Ukrainians, this could result to the depletion of foreign reserves in Ukraine.

I was later thinking Ukraine received donations in bitcoin, altcoins, US dollars, Euro, Pounds and other foreign currencies, probably could also be one of the reasons or the main reason that NBU restricted hryvnia to be used to buy cryptocurrencies because they have a lot of foreign reserve as a result of donation. I do not include bitcoin and altcoins as foreign reserve, though you know that.

[stompix]

I will agree with you, I noticed Russia did it and in few days or weeks later, the Russian rubles increased in price. But I am still just confused, what I thought before is that a country like to protect its foreign reserves, if the people in a country are demanding more of the foreign reserve, the central bank will not have option than to decrease the price of the local currency so to protect the foreign reserve depletion, which means that would still result to inflation or devaluation of local currency. If foreign reserves are used by Ukrainians, this could result to the depletion of foreign reserves in Ukraine.

Central bank foreign reserves have nothing to do with people's personal savings or stash under the bed reserves.
The main issue for a central bank when trying to protect their currency is to stop UAH from being converted to either $ or BTC, stopping people from converting $ into BTC ads nothing to their national currency, it just changes the form, just like some country would change their reserves from $ to euros.

Your concerns would have been right if they would have allowed purchases of bitcoin with UAH till that limit, but that's not the case.

I was later thinking Ukraine received donations in bitcoin, altcoins, US dollars, Euro, Pounds and other foreign currencies, probably could also be one of the reasons or the main reason that NBU restricted hryvnia to be used to buy cryptocurrencies because they have a lot of foreign reserve as a result of donation.

Receiving foreign currency strengthens the UAH, allowing UAH to be converted without limit to either $ or BTC would have negated all the positive effects donations had.
Again don't think that personal wallets act like the CB central reserve.

[Fortify]

Ukraine bans Bitcoin purchases with local currency amid martial law

Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.

The National Bank of Ukraine (NBU) continues taking measures to prevent capital outflows amid martial law by enforcing major restrictions on cryptocurrency purchases.

The Ukrainian central bank officially announced Thursday a set of restrictions on cross-border operations, prohibiting individuals from buying cryptocurrencies like Bitcoin (BTC) with the national fiat currency, the hryvnia (UAH).

I do not check the value of hryvnia but I think the war in Ukraine would have caused persistence rise in price of goods and services in Ukraine, which means inflation. NBU restrict Hryvnia to be used to purchase bitcoin a d altcoins but allowed foreign currencies to be used. I still do not understand the reason behind this because also foreign currencies have much to contribute to inflation if its reserves are depleting.

What could be the benefit of the NBC move to allow Ukrainians to only use foreign currencies to purchase cryptocurrencies and not allowing their own local currency to be used? But I think with this, only few people will have access to foreign currencies compared to those that will have access to local currency, which means a way to reduce Ukrainians that are buying cryptocurrencies.

I would say that the normal rules do not apply to a country at war and they need some leniency. This is a people who are fighting Russia to survive and face being wiped out because of this evil war. Right now all of their attention is focused on stabilizing their economy while trying to defend against the most sadistic type of attackers on the planet. Their government does not have time to worry about the intricacies of trying to create new financial regulations and rightfully so, when their citizens are getting slaughtered all over the country. It is also a method that can be used to infiltrate money from the enemy into subversive elements of their own country outside of the existing banking structure that they can oversee.

[Silberman]

Ukraine bans Bitcoin purchases with local currency amid martial law

Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.

The National Bank of Ukraine (NBU) continues taking measures to prevent capital outflows amid martial law by enforcing major restrictions on cryptocurrency purchases.

The Ukrainian central bank officially announced Thursday a set of restrictions on cross-border operations, prohibiting individuals from buying cryptocurrencies like Bitcoin (BTC) with the national fiat currency, the hryvnia (UAH).

I do not check the value of hryvnia but I think the war in Ukraine would have caused persistence rise in price of goods and services in Ukraine, which means inflation. NBU restrict Hryvnia to be used to purchase bitcoin a d altcoins but allowed foreign currencies to be used. I still do not understand the reason behind this because also foreign currencies have much to contribute to inflation if its reserves are depleting.

What could be the benefit of the NBC move to allow Ukrainians to only use foreign currencies to purchase cryptocurrencies and not allowing their own local currency to be used? But I think with this, only few people will have access to foreign currencies compared to those that will have access to local currency, which means a way to reduce Ukrainians that are buying cryptocurrencies.

I think this goes beyond being a good or a bad move by the national bank of Ukraine, this is the only move they have at their disposal and they are making use of it, personally I have never been in favor of such restrictions because at that point it is obvious the economy is in trouble, however unlike with what we see in countries like Venezuela in which this was caused by the mismanagement of the government, this case is different, their economy is at risk because of a sudden war, so under the circumstances it is understandable they are doing what they can to protect their economy, however assuming Ukraine gets to keep its independence after the war I would hope such a measure to be suspended as soon as it was reasonable to do so.

[Gyfts]

I would say that the normal rules do not apply to a country at war and they need some leniency. This is a people who are fighting Russia to survive and face being wiped out because of this evil war. Right now all of their attention is focused on stabilizing their economy while trying to defend against the most sadistic type of attackers on the planet. Their government does not have time to worry about the intricacies of trying to create new financial regulations and rightfully so, when their citizens are getting slaughtered all over the country. It is also a method that can be used to infiltrate money from the enemy into subversive elements of their own country outside of the existing banking structure that they can oversee.

Wartime or not, it isn't good policy to hold Ukrainians' funds hostage. Hypothetically, what happens if Ukraine loses the war and Russia overtakes the banking system, what happens to UAH? Probably becomes worthless, and citizens that weren't able to withdraw any funds outside of the monthly cap are out of luck. If currency was actually backed by something, or decentralized, none of this would be an issue. This isn't Ukraine's fault, rather an indictment of fiat currencies as a whole. There is no guarantee in sustainability. You aren't really in control of your funds.

[Cookdata]

Some days ago, they received donations from many supporters including some pledge members of the forum and that gave me a confidence that they may be the new El salvador. It is not as if they are threatened from other countries that have been sanctioned.
I'm only seeing buy, what about selling, will there be an implications if one decide to sell bitcoin to hryvnia, will there be a repercussions? In war people will need money and right now is only those with savings and investment will spend, selling a part of bitcoin to the local currency will be the fastest and easiest way if there is no penalty to that though.

[STT]

Capital controls are not ideal but its a war, its hard to blame any country desperate to take moves to continue its survival.   Many countries at times of war or in extremes have used capital controls, probably all the major economies of the world.   For some regimes its routinely done over decades alongside many other controls upon citizens to deny any freedom, I would just hope Ukraine does relax and allow freedom back to its citizens upon its return to normal conditions.
  I switched a few of my online subscriptions to buy or use Ukraine currency when paying that bill since its all converted for me on a CC bill it doesnt require much, hopefully it helps them to have buyers in the forex market and actually it lowers the bill for me as western prices are usually higher.

[Hydrogen]

Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.

Recently russia tried to denominate its natural gas purchases in its native ruble, in an effort to boost demand and increase its value.

On the opposite end of the spectrum, banning bitcoin purchases with ukraine's native currency, is likely to reduce demand and increase inflation.

We might deduce that this move is made to protect ukrainian citizens from holding ukraine's native currency which could fail soon.

The policy is intended to encourage the use of foreign currencies, which would be deemed more stable and reliable than ukraine's currency in the post invasion era.

[arallmuus]

Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.

Recently russia tried to denominate its natural gas purchases in its native ruble, in an effort to boost demand and increase its value.

On the opposite end of the spectrum, banning bitcoin purchases with ukraine's native currency, is likely to reduce demand and increase inflation.

We might deduce that this move is made to protect ukrainian citizens from holding ukraine's native currency which could fail soon.

The policy is intended to encourage the use of foreign currencies, which would be deemed more stable and reliable than ukraine's currency in the post invasion era.

This actually seems to me that like they are encouraging their citizens to hold native currency isnt it by only letting them buy another 'currency' in this case bitcoin with foreign currency. They are probably already aware that most of their citizens have switched to foreign currency because of this war so this is probably one of their way though

or is my take on this completely wrong? this is what it seems to me though

[Hydrogen]

Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.

Recently russia tried to denominate its natural gas purchases in its native ruble, in an effort to boost demand and increase its value.

On the opposite end of the spectrum, banning bitcoin purchases with ukraine's native currency, is likely to reduce demand and increase inflation.

We might deduce that this move is made to protect ukrainian citizens from holding ukraine's native currency which could fail soon.

The policy is intended to encourage the use of foreign currencies, which would be deemed more stable and reliable than ukraine's currency in the post invasion era.

This actually seems to me that like they are encouraging their citizens to hold native currency isnt it by only letting them buy another 'currency' in this case bitcoin with foreign currency. They are probably already aware that most of their citizens have switched to foreign currency because of this war so this is probably one of their way though

or is my take on this completely wrong? this is what it seems to me though

If the following quote in OP is correct.

Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.

Its not a complete ban on bitcoin purchase.

They're only banned from buying it with ukraine's native currency.

It would seem targeted at reducing transaction volume of ukraine's native currency, while encouraging the usage of foreign ones.

[DanWalker]

This is a restriction rather than a complete ban on bitcoin, not just limited to bitcoin it covers a wide range of asset transactions including cash like deposit to e-wallet, brokerage account or forex trading...This move by the Ukrainian government was to prevent money from leaving the country during the war. This is sad when they declare war on their citizens and also on the crypto market, the community has helped them receive large donations recently.

[adaseb]

I heard about this earlier on Twitter. Depending on who writes the article, many journalists who want click bait will type it out in a way to make it seem like they are after crypto however the truth is they are not just limiting crypto transaction but all other currencies including Euro and US dollars.

I don’t like how these journalists spin some articles by saying negative things about crypto. Most likely it gets more views when the headline is “Ukraine puts a limit on Bitcoin” rather than the truth and how “Ukraine puts a limit on all currencies”.

[Darker45]

I have actually created a thread on this last month because I found it surprisingly ironic that almost immediately after the president signed the crypto-friendly bill, On Virtual Assets, into a law, there were restrictions happening on the purchase of Bitcoin using the local currency.

This might appear bad for the people of Ukraine. However, tough times call for tough measures. And I think I understand that while this is an undesirable measure, it is timely. This is not the time to cause more outflow of the local currency. This is simply not the time to add more pressure to hryvnia. The country is at war against an invader. It doesn't help to contribute more pressure to the already suffering local economy.

[Semar Mesem]

When the country is threatened with high inflation then the best and fastest solution is to immediately legalize cryptocurrencies, what the ukraine government is doing is the right thing, the country is in chaos because of war and makes production and distribution problematic so that it will be threatened with inflation, of course we deserve appreciation so we can prevent Ukraine from experiencing an economic recession.