Economy 2022-11-15T05:10:58+02:00
Ukrainian news
NBU Sees Potential Risks Of Using Virtual Assets Bypassing State Regulation

NBU Sees Potential Risks Of Using Virtual Assets Bypassing State Regulation

NBU, cryptocurrency, national currency, virtual assets, monetary police

The National Bank of Ukraine (NBU) sees potential risks of using virtual assets bypassing government regulation.

Ukrainian News Agency learned this from the Basic Principles of Monetary Policy for 2022 and the midterm.

It is indicated that at the moment, due to the relatively limited prevalence of crypto assets and their high price volatility, they do not have a significant impact on the monetary policy and financial stability of Ukraine.

At the same time, as technological progress, the development and deepening of the virtual asset market, the growth of interest and awareness of individual and institutional investors, the prevalence of virtual assets may increase significantly, and their price volatility may decrease.

The National Bank, within its competence, will pay due attention to monitoring and minimizing the risks of the proliferation of virtual assets for monetary policy and the country's financial stability, establishing effective means of control over the circulation of financial virtual assets backed by currency values.

It is noted that the National Bank sees the following potential risks in the uncontrolled proliferation of virtual assets:

- the risk of substitution of the national currency and the emergence of parallel money circulation outside the effective control of the central bank;

- the risk of using virtual assets bypassing the current state regulation and supervision (bypassing currency regulation and uncontrolled flow of capital abroad);

- risks of overflow of a part of bank deposits into virtual assets and displacement of traditional banking, which may increase threats to the financial stability of the banking system and the country's financial system as a whole.

"To minimize these risks, the National Bank will take a principled position on preventing the narrowing of the scope of the hryvnia as the only legal tender in Ukraine and creating opportunities to bypass the current state regulation," the regulator emphasized.

As Ukrainian News Agency earlier reported, operations with cryptocurrencies are included in the list of subjects of financial monitoring.