Ukraine on Friday announced restrictions on bitcoin purchases to protect against capital flight as Russia’s war against the country enters its third month.
The National Bank of Ukraine bans Bitcoin purchases with hyrvnia & capping foreign currency purchases at $3,300 per month, Cointelegraph first reported.
The central bank said such measures are necessary to prevent capital outflows & ease pressure on Ukraine’s foreign exchange reserves. The NBU also called Bitcoin purchases as “quasi-cash transactions.”
The NBU is not the first institution in Ukraine to ban Bitcoin purchases. PirvatBank, the country’s leading commercial bank in the country, stopped its customers from buying bitcoins with Hyrvnia in March.
The move comes as Russia’s war against Ukraine has devastated its economy. Earlier this month, the World Bank estimated that Ukraine’s GDP is likely to fall by 45% this year.
Meanwhile, Ukraine’s new crypto caps follow earlier cryptocurrency adoption since the Russian invasion, 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 from a target of $200 million set in March.