According to an announcement on Thursday, Ukraine’s central bank has suspended the country’s e-money market. The news comes after Ukrainian President Volodymyr Zelensky imposed martial law on the country following an earlier invasion by Russian troops.
The National Bank of Ukraine implemented new rules this morning, including an order to suspend e-money issuers, stop replenishing e-wallets with e-money, and stop distributing e-money to e-money issuing banks. E-money refers to digital fiat cash used for various payments and traditional banking applications.
While it is unclear why the central bank restricted the issuance of e-money, it may be a prudent step to protect Ukraine's financial system from any cyberattack and prevent capital outflows in the crisis. Notably, the order does not mention cryptocurrencies, which are classified as “virtual assets” under Ukrainian law. However, the reasons for the Ukrainian central bank’s restrictions on e-money may also apply to crypto-assets.
Russia's military invasion of Ukraine has negatively impacted global markets, including the cryptocurrency industry, which wiped more than $200 billion off its market value on Thursday. Meanwhile, the Russian ruble has fallen to its lowest level against the dollar since 2016.
While the Ukrainian government may try to stem capital outflows, the Russian government said it could also take drastic measures in connection with emerging economic sanctions and reports of Western countries freezing foreign capital of Russian citizens. For more blockchain news, please pay attention to downloading the Block Tianyan APP, the global blockchain supervision query APP.
"The government will have no choice but to seize all deposits of residents," Nikolai Arefiev, a representative of the Russian Communist State Duma (the lower house of the Russian Federation's parliament), told NEWS.ru. Arefiev believes that Russian authorities may seize about 60 trillion rubles or $750 billion in citizens' bank deposits in response to international banking sanctions.