Topic: Is this a good move by national bank of Ukraine (Read 329 times)

It's going to bring some stability to Ukraine's national currency, and  this stability is very needed during war, especially the hot phase of war. Nearly every country in the world would take such measures if they were getting invaded and their economy was getting severely damaged.

But this artificial support for hryvnia only means that inflation will be high, and there will be a huge difference between black market and official exchange rate. At some point Ukraine will have to return to free market for their currency market, and it could come with a shock of sudden price drop.

When anyone use there own country's fiat money to purchase forgion products, there country buy back that amount while paying overtax. This is quite normal if things are not bad as they are currently in Ukraine.
Also to decrease any type of internal conspiracy they are controlling situation as much as they can and that's a very good initiative in my opinion.

This is understandable, where the Ukrainian currency must circulate to restore the country's economy, especially for crypto purchases which seem to have evaporated functionally for the country. With the current messy facilities and infrastructure and isolated economic activity, of course, Ukraine must be able to get out of this situation. and starting from the internal economic circulation in the country

This still falls to the law of demand and supply. Due to the invasion the economic values of the Ukrainian keeps depreciating and as a matter of fact the entire production and exportation scale for Ukrainian keeps depicting causing devaluation in their local currency. Investing in crypto with their local fiat means ditching hryvnia for crypto and will devaluate their local currency even further. Making it's value depreciate in the foreign exchange market and cause even higher inflation rate

Its during a time of war, hopefully its not their normal policy and its easily forgivable if its going to help the country to do so.    Exceptional measures become normal during time of war unfortunately, its part of what makes it so unprofitable and life is just a case of survival including government finance and budget ability.

Though I am not from that side but war affects a Country's economy and development. And I do not see any reason why Ukraine would leave their fiat currency and use a foreign Currency to buy and sell bitcoin. That is neo-colonialism and imperialism. I am sensing oppression. Ukraine has been oppressed to abandone their Fiat currency for a foreign Currency. Probably because of the war and the said Country promised to help them to fight and support them (Ukrain) Financially you otherwise. Advance Countries never help another country for Free. Although, there are negative aspect and positive aspect of war.

The negative aspect is that, war destroyed a Country's economy and development. Because when there is war in any country there would be no business activities that will be going on the country, at that stage, the Country's economy has been destroyed. So the best option for the host Country at that time is the use of bitcoin for the buying and selling of goods and services to sustain the fiat economy til the war is over. And the supportive Countries know all these things, so, they compelled Ukraine to abandone their Currency and foreign currency.

Then the position aspect of a war in any country is that. The technological advance Countries would used it to make more money buy selling their technology to them. And also even the Country's government make more money from the war because at that time, no spending in the war is counted or countable. Stealing of national fund is at it peak in a war period. All the expensives are for the war. So people make money from war.

But Ukrain abandoning it fiat currency for another currency is my concern here. Something is wrong at somewhere. There is treaty at somewhere.

In real sense it actually seems contradictory that a government that  recently accent to a policy that supports cryptocurrency trading in their country is restricting the use of the nation's currency in the purchase of cryptocurrency.

In as much as I feel the Ukrainian government is trying to protect the value of it's currency and at same time minimizing the rate of inflation that might be on due to the war. I wonder how majority of the citizens that don't have access or possession of foreign currency could benefit from this restrictions.

Cause it only place a few persons at advantage against majority. Be it as it may, people will always find their way out.

If I may ask, out of curiosity, is the Russian currency allowed to be used by the Ukrainian citizens in purchasing cryptocurrency since it's a foreign currency too?

I think that is a means that the government want to hold the value of their money and not to allow it to depreciate because countries that go to war have that kind of effect that the currency will fall down but maybe that is the policy to protect their economy and currency at this time of war. It will be hard times and discomfort for Ukrainians but it will not be a permanent position of the government.
Russia rubie also have that challenge and Putin is making it force to make countries buying gas and oil paying in local currency.

We need to understand that they are in crisis right now, and the government wants to contain their funds as much as possible. This action may change once they are out of the war and they are starting to re-build their economy. However, for now, they will be looking for options on how to keep those funds within their jurisdiction and not use their local fiat outside. I strong believe that things will change once this war is over.

The purpose of this is basically putting money back in to the nation. Everyone forgets this fact but the reality is that Ukraine is not just in war and loses money because of that, it also has people who flee the country and taking their valuables with them as well. This could be money, this could be gold, this could be anything. Which means that money is leaving the nation each time someone runs away with it.

So, if crypto is allowed and legal and even supported, then we would guess that people would be bringing money back in to the nation in form of digital currency, because crypto can't be bombed, and that would certainly help the nation in the long run as well.

When receiving crypto, the Ukraine government is better to manage regulations that provide convenience to its citizens to receive and buy bitcoin, the first thing to make is to make a team that can provide the most obvious information and provide legalization of exchanges so that Ukraine residents get ease instead of prohibiting residents from buying with local currency.

I think this is a confusing policy, buying cryptocurrencies with foreign money for fear of the local currency dropping, if in safe conditions of course this will be easy, but when there is a war of course it is a difficult thing for citizens to buy with foreign money, it should be when receiving crypto is then automatically allowed to buy or sell with the local currency.

I am a citizen of Ukraine, a resident of Kiev. Information as they say "first hand". On February 24, the beginning of the war, the dollar exchange rate was approximately UAH 28 per dollar, and in the first days it rose to UAH 35-38. But it turned out that it was a short-term panic race. Now the rate of the National Bank is UAH 29 (it is usually for commercial settlements, etc.), the cash market rate is UAH 32.
The situation is similar with the euro, the euro grew by about 10% compared to the pre-war period. Before the war, the exchange rate was 31-33 hryvnia/euro. Now the National Bank rate is UAH 31.6 for 1 euro, the rate for cash or for individuals is UAH 36 for 1 euro. There are no special problems with buying/selling currencies.

The reasons for locked transactions in the crypt/hryvnia pair are highly likely to be banned to prevent a negative impact on the local currency, manipulations on the foreign exchange market, criminal and illegal schemes, and uncontrolled withdrawal of assets from Ukraine (both internal and external "parasites"). As for me - a completely logical decision, for martial law.

There is no assumption.
The USD is the standard reserve currency, no matter what hate the USA groups try to picture with their propaganda it's the $, far behind the Euro, and then the rest don't matter, even Russia held it's reserves in $ and more importantly in banks on US soil.
No assumption, that's how things work.



What's the concern?


Of course the hryvnia, how could an economy the size of Nebraska damage the US.


El Salvador is going further and further in debt.
They wore forced to take another $400 million in debt to cover government spending and their deficit to GDP for 2021 is close to 8%.
They are asking the FMI for billions in loans and their whole Bitcoin stash is worth just around 70 millions, actually they've lost money at the current price.
Remember how he bought the dip at ~$48,670?

So no, there is actually not a single thing pointing out right now that BTC has made some significant impact on Salvador economy.

From what the bank announced, people can buy 100,000 hryvnia worth of cryptos per month from their foreign currency accounts (and that's around 3400 dollars). But, honestly, I can't really assess this move fully. I have a Ukrainian bank account, and before the war one could open a foreign currency virtual card online, convert the money from the foreign currency to local fiat and vice versa with no issues, all online within the online banking interface. But I haven't used that option for a while, so I don't know if it's still as easy. If it is, it's a great and simple workaround. If not, I'm sorry people can't pay for BTC in local fiat, but the move is clearly done to help stabilize our local fiat, which is of course hard to keep on a solid level because of the devastating war. It won't affect me anyway because I don't buy BTC with local fiat. On the contrary, I sell some for local fiat when I need to use it.

The National Bank of Ukraine had banned the cryto currency flow in their country. It may be the move for the Russia. Russia had do the transaction by the crytocurrency. So the war country was doing of opposite move to reduce the flow of money flow into the Russian government. The economic was the counter one for the opposite country involved in the war. This will reduce the economic flow into the Russia.

That’s also my thinking, their own fiat currency is already struggling even before the war begin and maybe they are encouraging their people to use other currency is to increase their Dollar reserve since once their people spend it, the money will go to them especially if their people used a bank platform just to have crypto. This can be a good move so they can help their own currency recover as well, and it is still good that Ukraine didn’t banned Crypto at all.

Exactly my point then, their government is encouraging their citizens to purchase bitcoin only through foreign currency ( probably because bitcoin it is considered as the same type with precious metal in Ukraine ) because if the citizens keep on spending those native currency especially to purchase another currency / cryptocurrency then I'd imagine inflation would sky rocketed in there

Well its actually pretty vague considering that they are still in war

In Ukraine, both the authorities and the population do not even consider the possibility that Russia will be able to occupy the entire territory of Ukraine. The people themselves will not allow this. Therefore, the people think only about victory, although they allow other options. Therefore, already now, under the shelling of Russian missiles, the sowing campaign is going on everywhere, the ruins of houses are being sorted out and damaged bridges and other infrastructure are being restored.
It must be admitted that Russia is deliberately destroying industry and civilian infrastructure, systematically destroying the economy of Ukraine. Based on this, the National Bank of Ukraine is forced to take measures that would support the economy and financial system. Unlike Russia, where the free circulation of the dollar and the euro is prohibited and an artificial exchange rate for these currencies has been created, Ukraine adheres to market relations, but with some restrictions. This is a forced and temporary measure.

I think it's a really good move. Such measures will help keep the capital in circulation and will not let the money on crypto wallets disappear. And in general, in Ukraine, people have long kept their savings in dollars, the hryvnia has fallen very much since 2012, almost by half.