Privatbank, Ukraine’s Largest Bank, Suspended Money Transfers to Crypto Exchanges Amid Martial Law

Last Friday, Privatbank said that it would temporarily prohibit its clients from acquiring Bitcoin using the Ukrainian hryvnia, its main fiat currency (UAH). However, on March 15, the interim prohibition was extended.

PrivatBank is subject to limitations due to a National Bank of Ukraine decree (NBU). On February 24, the Central Bank of Ukraine enacted measures and restrictions under martial law.

Note: Martial law often refers to temporary military authority of routine civic operations and civil law.

Ukrainians may now only acquire Bitcoin and other cryptocurrencies in foreign money, with total monthly purchases at 100,000 UAH ($3,300). International peer-to-peer transactions are likewise subject to the applicable limit.

ACCORDING TO THE RELEASE, the NBU has classified crypto purchases as “quasi cash transactions,” along with electronic wallet deposits, foreign exchange transactions, and trip payments. The central bank hopes to prevent an “unproductive outflow of capital” from the nation by imposing limits on such transactions while the country is under martial control.

The NBU wrote, “The relevant changes will help improve the foreign exchange market, which is a necessary prerequisite for easing restrictions in the future, as well as reducing pressure on Ukraine’s international reserves.”

Why did Crypto become so important?

On Thursday, President Volodymyr Zelenskyy passed a new bill that legalizes cryptocurrency in Ukraine. The move allows domestic and international crypto exchanges to operate lawfully and enable local banks to create cryptocurrency accounts.

Since Russia’s war with Ukraine began, Ukraine has received hundreds of millions of dollars in cryptocurrency donations.

After the president signed the bill, Mykhailo Fedorov, Ukraine’s minister of digital transformation, stated, “the signing of this law by the President is another important step towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine.”

Crypto users who wish to give digital assets to the country may now do so through the Ukrainian government’s official contribution scheme. The administration hopes to raise $200 million in cryptocurrency donations. The government has collected somewhat more than $55 million as of this writing.

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