Ukraine’s central bank sees both promises and threats in Bitcoin

cointelegraph.com:

The National Bank of Ukraine (NBU) has expressed a mixed stance on cryptocurrencies like Bitcoin (BTC) after a year of war in the country.

The central bank of Ukraine sees both good and bad in virtual assets, taking a more skeptical approach to crypto due to financial and economic issues caused by the invasion, according to the NBU press office.

In April 2022, the NBU prohibited citizens from buying cryptocurrencies like Bitcoin using the national currency, the hryvnia (UAH), only allowing such purchases via foreign currency accounts. The central bank also set a monthly limit on such purchases, prohibiting Ukrainians from buying more crypto than worth UAH 100,000 ($3,300) per month. The restrictions also apply to cross-border peer-to-peer transactions.

The administrative restrictions involving operations with cryptocurrencies in Ukraine are temporary, a press officer for the NBU told Cointelegraph on March 9. The limits will be “gradually weakened as the functioning of the economy and financial market of Ukraine normalizes,” the NBU said, adding:

According to the regulator, the specified restrictions were necessary for Ukraine in order to stabilize the situation in the foreign exchange market and preserve macro-financial stability.

“Transactions with cryptocurrencies can be used to bypass currency regulation, in particular — as a channel for unproductive capital outflow from the country, which currently poses threats to macro-financial stability,” the NBU representative stated.

Related: Ukraine netted $70M in crypto donations since start of Russia conflict

Ukraine’s central bank also sees risks of “substitution of the national currency and the emergence of parallel money circulation.” According to the NBU, such risks