- Crypto ownership legalized with payment restrictions.
- Crypto regulations are directed at defending the hryvnia and keeping inflation in control.
- As the central bank acts to regulate, it does not pose a threat to economic stability.
A concerted effort is being made by the Central Bank of Ukraine to make the licensing of cryptocurrencies easier to achieve. But the bank insists that crypto must not be integrated as an official payment instrument, notes Governor Andriy Pyshnyy.
Such an attitude is unexpected in the crypto environment, which, as a rule, strives to expand the use of payments. The strategy of Ukraine will allow it to control crypto without subjecting the national currency system to risks.
Why make crypto legal -yet illegal to use as a payment method?
Governor Pyshnyy pointed out that Ukraine would like to integrate cryptocurrencies into the financial system with caution. The idea is to permit ownership, trading, and investing, but limit crypto as a direct payment mechanism.
Specifically, he emphasizes the importance of taking precautions to prevent inflation and monetary instability in the nation. In spite of the fact that Pyshnyy claims that Ukraine is making progress toward legalization, the usage of cryptocurrencies as a means of payment will not be permitted in this country.
The initiative is a safety measure after the entire world expressed concern over the volatility and abuse of cryptocurrencies. Ukraine aims to enjoy technological innovation and, at the same time, protect economic stability.
What Does This imply to Ukrainians and Crypto in Ukraine?
The fact that the crypto assets can be owned legally and regulated is also the position of the central bank. Nevertheless, no one can purchase goods or services with cryptocurrency under this proposed framework by businesses or individuals.
This will ensure that crypto does not compete with the national currency of Ukraine, the hryvnia. It also reduces price fluctuations and fraudulent risks. This is viewed as a compromise by the experts: financial innovation is fostered without the loss of currency sovereignty and inflation control.
Such a policy will invite investors interested in legal crypto markets, yet vast numbers of people using crypto as a daily means of transactions will be a long way off.
Context on Inflation and Currency Stability in Ukraine
Ukraine currently battles inflation pressures, complicating monetary policies. Pyshnyy emphasized that financial reforms, such as crypto bills, should be focused on efforts to contain inflation.
He claimed that unregulated crypto payments could have a negative impact on monetary policies and raise risks of inflation.
Therefore, the crypto legalization strategy of the bank is part of a more comprehensive plan to stabilize the already unstable economy of Ukraine in the face of global uncertainties.
