Russia-Ukraine Crisis: Ukrainian Central Bank Suspends Electronic Cash Transfers

Amid the Russia-Ukraine crisis, Ukraine’s central bank has suspended digital money transfers and cash withdrawals.

In a statement, the National Bank of Ukraine (NBU) also suspended the foreign exchange market and prohibited the issuance of foreign currency from retail bank accounts.

CNBC reports that the written order by the Central bank also indicated that the distribution of e-money was temporarily off-limits.

The NBU however noted that the restrictions do not affect transactions made to and by the Ukrainian government, enterprises, and institutions involved in mobilization tasks and payments under special permits issued by the monetary authority.

“All cashless payments remain unlimited, ATMs must be supplied with cash without limitations, and banks shall ensure the uninterrupted operation of their branches”, the NBU stated.

The NBU also resolved to limit daily cash withdrawals in local currency to 100,000 hryvnia (approx. $3,350), except for wages and social payments.

Following this order, some Ukrainians have reportedly started turning to cryptocurrencies. In an Interview with Coindesk, founder of Kuna, a popular Ukrainian crypto exchange platform, Michael Chobanian said: “We don’t trust the government. We don’t trust the banking system. We don’t trust the local currency. The majority of people have nothing else to choose apart from crypto.”

CNBC reports further that before the Russian attack, Ukraine had plans to open the cryptocurrency market to businesses and investors. According to the Kyiv Post, top state officials have also been touting their crypto street cred to investors and venture capital funds in Silicon Valley. However, the Russian invasion has pulled focus from these efforts.

Investors King had earlier reported that the price of Bitcoin, the world’s largest cryptocurrency has dropped as a result of the Russian invasion. Bitcoin has already shed 12% in under 24 hours as military aggression in Ukraine ramped up.

Ukraine’s capital, Kyiv was attacked by explosions in the early hours of Thursday, causing thousands of Ukrainian residents to flee the area. Bombs and missiles reportedly went off in some parts of Ukraine on the orders of the Russian President, Vladimir Putin.