Putin’s “special military operation” has caused great financial uncertainty in Ukraine. To bring more clarity to the situation, the National Bank of Ukraine reported that local monetary institutions will suspend the issuance and distribution of electronic money.
Central Bank of Ukraine presents its policies
It’s safe to say that Russia’s military operation in Ukraine is the top news today (24 February). As Russian troops head into its neighbour’s biggest cities, many of the latter’s citizens have begun to leave their homeland.
The National Bank of Ukraine has guaranteed that the branches will operate uninterruptedly in the absence of threat to the life and health of the population. It also provided access to safes and non-cash payments. In addition, ATMs are supported by cash without restrictions, the institution said.
Starting today, however, local banks will suspend the issuance, replenishment and distribution of electronic money. These funds often refer to fiat currencies in digital form, as it is not yet clear whether this extends to cryptocurrencies.
The central bank also introduced a moratorium on cross-border payments in foreign currency. The move is expected to boost the employment of the Ukrainian hryvnia and thus protect it from a free fall in the coming days.
Subsequently, the institution suspended the financial operations of residents who participated in the armed aggression against Ukraine.
“Appropriate actions are necessary to ensure the reliable and stable functioning of the country’s financial system and maximize the activities of the Armed Forces of Ukraine, as well as the smooth functioning of critical infrastructure,” summarized the National Bank of Ukraine.
How did the cryptocurrency market react to the war?
Similar to other financial markets, the digital asset industry has taken a serious hit following the news of the Russian invasion. Earlier today, bitcoin dropped to nearly $34,000 while ETH dropped to $2,300.
It is worth noting, however, that many see digital assets (especially BTC) as a hedge against inflation and an alternative investment strategy during crisis events. With that said, it remains to be seen how the cryptographic field will react to the financial consequences of the military conflict.
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