Ukrainians have been seen turning to cryptocurrency after the central bank suspended electronic cash transfers this week, as fighting with Russian forces spread in the capital, Kyiv.
With forex trading also banned in the country, this has led to citizens searching for alternatives and turning to cryptocurrencies.
Increased demand for cryptocurrency exchange platforms:
Data from popular Ukrainian cryptocurrency exchange Kuna shows a surge in trading volumes for Tether, the world’s largest stablecoin, this week.
It also appears that Ukrainians are paying a premium of 10% to 20% for the USDT currency whose value is closely related to the US dollar.
While the current price of the hryvnia to the dollar is around 30, the USDT is trading between 32 to 35 hryvnia.
Tether and most stablecoins have seen increased demand in recent weeks, amid increased market volatility.
Danish journalists who are currently in Ukraine said they had to buy a car using bitcoin, due to a lack of cash.
Bitcoin donations to Ukraine exceeded $4 million, which we discussed in previous articles on Arab Bitcoin.
Cryptocurrency adoption Ukraine:
The adoption of cryptocurrencies in Ukraine is not a new event.
The country recently passed a law to recognize and regulate cryptocurrencies, and it had intended to open the market to foreign investors before the Russian invasion.
Chainalysis data ranked Ukraine the fourth largest cryptocurrency adoption country in the world, in a report released last year.
Despite widespread condemnation of Moscow’s actions, the Russian-Ukrainian conflict has so far shown no signs of de-escalation.
Fears of conflict have caused sharp volatility in financial markets, including the cryptocurrency market.
The value of safe havens such as gold and the dollar rose, while oil prices also rose on bets of Russian supply disruptions.
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