Value of Crypto Assets Worldwide Depreciate As Ukraine Suspends Use of Digital Currencies February 2022

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Following Russia’s invasion of Ukraine today February 24, 2022, the cryptocurrency market has taken a nosedive as Ukraine suspends the use of any form of electronic money.

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.

Ukraine’s Central Bank Introduces Its Policies

It is safe to say that Russia’s military operation in Ukraine is the top news today (February 24). As Russian troops are heading towards the biggest cities of their neighbor, many of the latter’s citizens started leaving 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.

As of today, though, local banks will suspend the issuance, replenishment, and distribution of electronic money. Such funds usually refer to fiat currencies in digital form, as it remains unclear whether 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 halted the financial operations of those residents who took 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?

Similar to the other financial markets, the digital asset industry took a serious hit after the news of the Russian invasion. Earlier today, bitcoin dipped 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.

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