Crypto demand Skyrockets In Ukraine after cash transfer suspension

Feb 26, 2022

Ukrainian citizens were seen piling into crypto after the central bank suspended electronic cash transfers this week, as fighting with Russian forces spread  into the capital Kyiv.

With foreign exchange trade also blocked in the country, this has seen citizens seek dollar alternatives in crypto.

Data from popular Ukrainian crypto exchange Kuna shows trading volumes in Tether, the world’s largest stablecoin, have surged this week. Ukrainians also appear to be paying a 10% to 20% premium for the token, whose value is closely pegged to the U.S. dollar.

Danish journalists currently in Ukraine said they had to purchase a car using bitcoin, due to cash being in such short supply. Bitcoin donations to Ukraine have also surpassed $4 million, Forbes reports.

Crypto adoption in Ukraine is not a new event. The country recently passed  a law to recognize and regulate cryptocurrencies, and had intended to open up the market to foreign investors before the Russian invasion.

Blockchain data firm Chainalysis ranked Ukraine as the fourth largest crypto adopter in the world, in a report released last year.

Fears of the conflict have caused wild swings in financial markets, including crypto. Safe havens such as gold and the dollar have risen in value, while oil prices have also surged on bets of Russian supply disruptions.