Ukrainians Opt for USDT As Central Bank Restricts Foreign Cash Flow

The intensive war between Russia and Ukraine has hit another level as Ukraine’s central bank puts some restrictions on foreign cash transfers alongside foreign currency issuance. Citizens of the war-torn nation of Ukraine are now seeking an alternative route to access foreign cash and have identified cryptocurrency, particularly stablecoins, as their preferred option.

According to reports, Ukrainians now rely on stablecoins for their transactions overseas. Currently, Ukraine’s crypto exchange Kuna is offering a 5% discount on Tether stablecoin purchases to ease the pain experienced by Ukrainians when accessing foreign cash. 

Ukrainians Have Low Trust for the Traditional Banking System

The situation in Kyiv is worrisome, with international communities involved to see the possibilities of fostering peace between Russia and Ukraine. While the world awaits the outcome of the peace meeting today, the day-to-day running of various businesses in the nation is affected.

The ban on Fx issuance at retail banking institutions alongside the transfer of overseas currency by the central bank is limiting business transactions. As a result, the citizens now have low trust in the system, which is why they have diverted to crypto.

Besides, Ukraine is already conversant with using cryptocurrencies. The country has been receiving crypto donations in BTC and ETH since Russia invaded Ukraine last week. One of Ethereum’s founders, Vitalik Buterin, has spoken against the invasion. 

Ukraine Asks Crypto Platforms to Suspend Russian Accounts

Earlier today, Ukraine’s Vice PM Mykhailo Fedorov asked cryptocurrency exchanges to suspend Russian users’ accounts in the wake of the attack. In his post, Fedorov told exchanges that they shouldn’t block only addresses linked to Russian users but to those who sabotage the country.

But, this request was criticized by market experts. From their viewpoint, it wouldn’t be correct to involve civilians in the matter. The issue is clearly between the Russian government and Ukraine.

Russia faces several sanctions from the international communities for their attack on Ukraine. Recently, the country has been cut from accessing the SWIFT network, a move that will block Russia’s access to its foreign reserves. In addition, the Russian Rouble has plunged in the market against the USD.

Once again, crypto takes centre stage. This isn’t the first time crypto plays a massive role in an intensive conflict. During the Freedom Convoy protest in Canada, Canadians received crypto donations after the government had frozen their bank accounts. 

Last week, the Ukrainian government called for more crypto donations. The country has raised over $10 million in various digital currencies presently. Crypto could also play a massive part in Russia’s economic recovery and escape from the economic sanctions that would bite them. Russia and Ukraine peace talks are underway near the Belarusian border at the moment. 

Leave a Comment