Ukraine’s central bank has temporarily prohibited the issuance of new electronic money and the topping up of digital cash wallets.
Per a Thursday announcement, Ukraine’s central bank has suspended the country’s electronic currency markets. This news comes after the Ukrainian president Volodymyr Zelensky imposed martial law in the country following the invasion of Russian forces earlier today.
The National Bank of Ukraine implemented new rules this morning, including an order to suspend e-money issuers, stop the replenishment of e-wallets with e-money, and halt distribution of e-money to e-money issuing banks. E-money refers to digital fiat cash used with various payment and traditional banking applications.
While it is not clear why the central bank curbed e-money issuance, it may likely be a prudent step to safeguard Ukraine’s financial systems from any cyber-attacks and prevent capital outflows amid the crisis. Notably, the order did not mention cryptocurrencies, which are classed as “virtual assets” under Ukrainian law. However, the reasons why the Ukrainian central bank has placed restrictions on e-money likely also apply to crypto assets.