Putin’s “special military operation” caused major financial uncertainty in Ukraine. To bring more clarity to the situation, the National Bank of Ukraine informed that local monetary institutions will suspend the issuance and distribution of electronic money.
The Central Bank of Ukraine presents its policies
It’s safe to say that Russia’s military operation in Ukraine is making headlines today (February 24). As Russian troops move towards their neighbor’s largest cities, many of the latter’s citizens have begun to leave their homeland.
The National Bank of Ukraine ensured that branches will work in an “uninterrupted mode in the absence of threat to life and health of the population.” It also provided access to safe deposit boxes and non-cash payments. In addition, ATMs are supported by cash without restrictions, the institution informed.
Effective today, however, local banks will suspend the issuance, replenishment and distribution of e-money. These funds usually refer to fiat currencies in digital form, as it is not clear if this extends to cryptocurrencies.
The central bank also introduced a moratorium on cross-border foreign currency payments. The move is expected to enhance the employment of the Ukrainian hryvnia and thus protect it from a freefall in the days to follow.
Subsequently, the institution stopped the financial operations of residents who had taken part 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 operation of critical infrastructure,” the National Bank of Ukraine summarized.
How did the crypto market react to the war?
Like other financial markets, the digital asset industry was hit hard after news of the Russian invasion. Earlier today, bitcoin fell to nearly $34,000, while ETH fell to $2,300.
It is worth noting, though, that many view digital assets (especially BTC) as a hedge against inflation and an alternative investment strategy during crisis events. With that said, it is yet to be observed how the crypto field will react to the financial consequences of the military conflict.
