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Ukraine Central Bank Limits Cash Withdrawals Amid Russian Assault

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Ukraine Central Bank Limits Cash Withdrawals Amid Russian Assault

The central bank of Ukraine has capped withdrawals of cash in national fiat and banned those in foreign currency. The monetary authority says the measures aim to ensure the functioning of the nation’s financial system under the martial law introduced in response to Russia’s military offensive.

National Bank of Ukraine Restricts Hryvnia Withdrawals, Fixes Exchange Rates

As citizens were lining up at ATMs and bank offices on Thursday, the National Bank of Ukraine (NBU) adopted a resolution limiting daily cash withdrawals in local currency to 100,000 hryvnia (approx. $3,350), except for wages and social payments. The regulator prohibited the release of cash funds from accounts in foreign currency as well.

The decision came after in the early hours on Feb. 24, Russia launched a “special military operation” in Ukraine, as announced by President Putin. Explosions of rockets hitting targets across the country and reports of Russian tanks crossing the border sent many Ukrainians fleeing major cities, including the capital Kyiv, amid what has been turning into a full-scale Russian invasion.

Following the imposing of martial law by Ukrainian President Volodymyr Zelensky, the NBU insisted that banks should continue to operate, subject to the adopted restrictions. These also include the suspension of foreign exchange operations with the exception of sale of foreign currency by customers. The official exchange rates of the hryvnia have been fixed, the authority added, at 29.25 hryvnia per $1 and 33.17 per €1, respectively.

The central bank has imposed a moratorium on cross-border foreign currency payments and prohibited Ukrainian banks from processing debit transactions on the accounts of residents of the Russian Federation. The ban also covers the issuance and distribution of electronic money as well as depositing funds to e-wallets.

The document makes no explicit reference to other digital assets such as cryptocurrencies, which Ukraine has been working to regulate. The parliament of the East European nation, ranking among the region’s leaders in terms of crypto adoption, recently approved a law “On Virtual Assets” which lists the NBU as one of the main regulators of the market. However, the legislation is yet to enter into force.

The National Bank of Ukraine noted that the restrictions do not affect transactions made to and by the Ukrainian government, enterprises, and institutions involved in mobilization tasks and payments under special permits issued by the monetary authority. All cashless payments remain unlimited, ATMs must be supplied with cash without limitations, and banks shall ensure the uninterrupted operation of their branches, the NBU emphasized.

What are your thoughts on the restrictions introduced by the National Bank of Ukraine? Tell us in the comments section below.

US Cash Crisis: Withdrawal Limits Spark Bank Run Fear

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US Cash Crisis: Withdrawal Limits Spark Bank Run Fear

The entire world has been focused on the economy as the coronavirus outbreak has devastated global markets. While stocks, commodities, and barrels of oil plunge in value, there’s been considerable demand for cold hard cash in certain countries. According to reports, Wall Street’s elite has been trying to withdraw $30-50K per person as they flee the Hamptons. Moreover, various individuals across the U.S. are claiming financial institutions like Chase and Bank of America are restricting cash withdrawal amounts.

Also read: Edward Snowden ‘Felt Like Buying Bitcoin’ While Traders Hunt for the Market Bottom

US Banks Impose Withdrawal Restrictions as Customers Empty Accounts Demanding Hard Cash

Cash is something everyone looks for during times of economic hardship and right now banks are struggling to provide liquidity. During Wednesday morning’s trading sessions, global stock markets and futures continue to lose ground. The price of oil has plummeted even further from last week and is at its lowest value per barrel in 17 years. The price of crude oil is hovering around $43 per barrel and Goldman Sachs predicts the price will drop to $20 per barrel soon. Oil prices have already begun to hurt people within the gas industry as 3,500 Halliburton employees from the North Belt facility in Houston have been laid off due to the price decline. While facing massive layoffs in industries like airlines, tourism, and construction, people are in search of hard cash to help hold them over through the economic storm.

News.Bitcoin.com reported on how in the Hamptons, New York’s elite have been going to banks and asking to withdraw large sums of cash. According to reports, banks like Chase, JPMorgan and Bank of America (BoA) have been limiting withdrawals. This is because the rich from New York have been asking for $30-50K withdrawals so banks have created a limit between $3-10K in some areas. During the market massacre on March 12, Manhattan Bank temporarily ran low on $100 bills after a large rush for cash. A BoA spokesperson told the public that there were only issues with large denominations and individuals are able to withdraw $20-50 notes. “We don’t keep large amounts of cash in big bills in the branches because it’s dangerous for our employees and there is low demand,” BoA stated.

There are people complaining on social media about the withdrawal limits from certain banks in the U.S over the last few days. “Go to the bank today and ask to withdraw your entire balance,” one individual tweeted on March 17. “They are refusing to give out more than $5,000 — Even if your account has $20k. Even if your normal withdrawal limit is $10,000 daily.” On March 14, a person from New York tweeted: “Food chain is broken. Went to Stop & Shop [and] shelves are empty. Meats gone. No more eggs — [and] the bank would only permit a $2,500 limit per day withdrawal.” Another Twitter post shows a man visiting Chase bank and recording a video of a manager refusing to give him $5K. Moreover, the branch manager from Chase asked the person to delete the video. The man said:

Chase is insolvent — Bank run. [The bank] proceeded to lie to me to go around outside the drive-thru without my mask and she would give me the $5K promised earlier ($2K rationed per customer). I did so and they refused to give me it — Manager demanded I delete the video.

European Banks Shutter, German Banks Impose Withdrawal Restrictions, and Bank Runs from the Past

The U.S. is not the only country that is having cash problems as European banks have shuttered hundreds of branches since the Covid-19 spread. For example, the financial institution HVB closed 101 branches across the EU. Reports detail that a few German banks are imposing withdrawal limits and customers can only withdraw 1,000 euros per visit. Ever since last Thursday’s stock market crash, people are reminded of the economic disasters in the past like 2008’s Financial Crisis, ‘Black Wednesday’ in 1992, and ‘Black Monday’ in 1987.

US Cash Crisis: Withdrawal Limits Spark Bank Run Fear
Men and women line up in a run on a bank in New York City during the early 1900s. Depictions of bank runs can be seen in classic movies like Frank Capra’s “It’s a Wonderful Life.”

However, those crashes didn’t cause massive bank runs; the last time that happened was during the Wall Street crash in 1929. During the Great Depression throughout the early 1900s, the 20s and 30s, there was a massive run on savings and loan operations and financial institutions across the U.S. The economic crisis sparked by the coronavirus is causing these fears again.

“Bank runs are starting in Colorado,” another man from the U.S. tweeted on March 17. “Smaller towns and small cities are not allowing walk-ins [or] anyone, along with limits on cash withdrawals.”

Bitmex Research: ‘Bitcoin Price May Shine in the Volatile Inflationary Aftermath’

In this crazy environment of financial calamity, people are uncertain where cryptocurrencies like BTC will stand. A blog post published on March 17 by Bitmex Research predicts high inflation from all of these events. Just like many crypto supporters, Bitmex researchers think that BTC will shine during the inflationary aftermath. “In such an economic environment, with high inflationary expectations, gold looks set to shine,” Bitmex wrote. “But what about Bitcoin? Bitcoin has crashed by almost 53% (peak to trough) in the 2020 Coronavirus crash, as investors raced to the U.S. Dollar. In many ways this was inevitable. Where the Bitcoin price may shine is in the volatile inflationary aftermath of the response to the crash.”

US Cash Crisis: Withdrawal Limits Spark Bank Run Fear
The price of BTC on March 18, 2020, at 10:30 a.m. EST.

At press time, BTC is hovering just above the $5K region but the asset’s value seems to be dragging downwards and flirting with sub-$5K. Even with prices so low, people believe the possibility of bank runs and significant cash liquidity issues will drive more people toward cryptocurrencies. “If you think bitcoin isn’t a safe haven asset, just wait until the bank runs begin,” BTC supporter ‘Bitcoin Bacon’ tweeted on Tuesday. The day prior another individual shared a picture of his stacks of $100 bills on Twitter and said: “Advice…[I] just cleaned out one of my accounts to get liquid…bank runs will be here by next week.”

What do you think about the economic carnage causing cash shortages and banks adding withdrawal limits? Do you think that cryptocurrencies like bitcoin will benefit from this financial calamity? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Cryptocurrency and global market prices referenced in this article were recorded on March 18, 2020.

Image credits: Shutterstock, Twitter, and Markets.Bitcoin.com.

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The post US Cash Crisis: Withdrawal Limits Spark Bank Run Fear appeared first on Bitcoin News.

How Cryptocurrencies Can Mitigate Some of Brexit’s Negative Effects

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How Cryptocurrencies Can Mitigate Some Negative Effects of Brexit

Brexit, the European divorce saga that has been going on for years, has created a lot of headaches for politicians and ordinary people on both sides of the Channel. The process of Britain leaving the European Union is now heading towards another one of its deadlines while London and Brussels are trying to separate with an agreement. U.K. Prime Minister Boris Johnson vowed there will be an exit on October 31, deal or no deal. Brits and their Euro neighbors are bracing for another jolt in the continent’s economic and financial system. Cryptocurrencies, independent of centralized political decisions, can provide some stability and utility in these uncertain times in the fiat world.

Also read: Here’s How Europeans Can Deal With Negative Interest Rates

Britain’s Exit From United Europe

Britain’s relationship with Europe has never been straightforward or unambiguous. “Fog in Channel, Continent Cut Off” is a newspaper headline that was probably never printed but it very well describes the British attitude towards the mainland. And it’s not like Europeans haven’t given as good as they’ve gotten. United Kingdom’s entry into the European Economic Community was vetoed twice by France, in 1963 and 1967, with General De Gaulle citing the British hostility towards European construction, lack of interest in the common market as well as the economic differences that in his view made Britain incompatible with the rest of Europe.

How Cryptocurrencies Can Mitigate Some of Brexit's Negative Effects

However, at the time the majority of the British people and their political representatives wanted to join what has since become the European Union. They achieved that at the third attempt, years after De Gaulle’s resignation and death, with the U.K. becoming a member of the European Communities (EC) on Jan. 1, 1973 and confirming its full membership in 1975, in the nation’s first referendum. Back then, all major political parties, the mainstream media, and most importantly the majority of Britons supported the continuation of membership – over 67% voted to stay in. Besides, London managed to negotiate a list of opt-ins and opt-outs of key European policies including the Schengen Agreement, the Economic and Monetary Union, the Area of Freedom, Security and Justice, the Charter of Fundamental Rights, and even win the U.K. rebate.

Another poll on Britain’s EU membership decades later produced a quite different outcome, though. Over half of the electorate that took part in the referendum on June 23, 2016 (51.9%) voted in favor of leaving the European Union. Despite the non-binding nature of the referendum, the British government kept its promise to implement the result. David Cameron, leader of the Conservative Party and British prime minister at the time, who campaigned for remaining in the EU, resigned and was succeeded by his home secretary Theresa May in the summer of 2016. She initiated the EU withdrawal process on March 29, 2017, which was expected to complete within the next two years. Britain triggered Article 50 of the Treaty on European Union.

Deal or No Deal, That Is the Question

Britain’s second female prime minister stepped down in July after the withdrawal agreement her cabinet reached with the EU was rejected three times in parliament earlier this year. She was then replaced by her former Foreign Secretary Boris Johnson whose government continued the negotiations with Brussels. Johnson, a leading figure in the Vote Leave campaign, stated that the United Kingdom would exit the European Union on Oct. 31, 2019, regardless of whether a deal has been reached by that date or not.

How Cryptocurrencies Can Mitigate Some of Brexit's Negative Effects

With British lawmakers blocking a no-deal Brexit, however, Johnson proposed a general election on October 15 but the motion failed. He also asked the Queen to prorogue parliament from September 10 in an effort to prevent parliamentarians from stopping the exit without agreement by narrowing the window in which they could do so. In the meantime, a string of court cases have challenged the prime minister’s actions. In the absence of a written British constitution, this could create legal confusion.

Brexit has sown discord in British society and posed questions about the future of the European Union in general. Euro skeptics and pro-Europeanists span the political spectrum in Britain. While the major political forces, the Labour Party and the Conservative Party, each have their claims regarding the terms of the agreement with the EU, the Liberal Democrats, the Scottish National Party and other factions directly seek a reversal of Brexit through a second referendum on the matter.

Brexit’s Economic Impact

There is a widespread consensus among economists that Britain’s decision to leave the European Union is already negatively affecting its economy. The costs associated with the vote result and the withdrawal process amount to between 2 and 2.5% of the U.K.’s gross domestic product, according to various studies conducted last year. Analysts have calculated that inflation rose by 1.7% in 2017. Other estimates suggest that the country could have lost another 1% of its national income during the same period, while some long-term analyses put the future annual losses at up to 9% of GDP.

At the same time, proponents of Brexit point out that the United Kingdom is the second-largest net contributor to the EU budget, after Germany, and after Brexit it should register serious savings that could translate into tax cuts for its residents or increased government spending on social programs, for example. Official figures show that in 2014, the country’s contribution was £14.4 billion (around €16 billion at the current exchange rate), after the rebate. Britain gave the EU €11.5 billion in 2015, or over two times the contribution of France.

How Cryptocurrencies Can Mitigate Some of Brexit's Negative Effects

How Cryptocurrencies Can Help Brits and Europeans

One of the biggest impacts Britain’s divorce with the EU is likely to make has important socio-economic and even humanitarian aspects. Aside from economic issues such as low income and unemployment, opposition to immigration and expectations that the U.K. will regain full control over its borders after the withdrawal were among the most motivating factors for voters in the Leave camp. Many of them are competing for low-paid, unqualified jobs with Eastern European guest workers.

Brexit, especially if it happens without a comprehensive deal with Brussels, will certainly limit immigration flows from countries in the European Economic Area, as it will curtail free movement between the Continent and the United Kingdom. However, according to an analysis conducted by the Migration Policy Institute, Great Britain will continue to accept around 500,000 immigrants annually and official statistical data indicates that immigration from outside the European Union has already increased. Net immigration is projected to be at least 200,000 people each year, despite the U.K.’s departure from the EU.

Newcomers and those EU immigrants who choose to stay in the United Kingdom, especially if a deal with Europe allows them to retain their employment rights, will continue to send money to family members in their home countries. Despite Britain being a member of the EU, it never adopted the common European currency, the euro, instead keeping its national fiat, the British pound. As a result, money transfers within the fiat system involve currency exchange and additional bank charges. The separation from the European Union is only going to complicate things further for anybody sending money abroad.

How Cryptocurrencies Can Mitigate Some of Brexit's Negative Effects

Cryptocurrencies offer the easiest and cheapest way to send remittances home. You don’t even need a third party to transact with digital money. All that the sender and receiver must have is a crypto wallet, such as the Bitcoin.com Wallet which supports both bitcoin cash and bitcoin core.

In the past few years, Britain, which is one of the world’s financial capitals, has become a hotspot for the growing fintech industry. Leading European companies dealing with digital assets are now based in the U.K. And although in the aftermath of the Brexit referendum some have taken steps to establish a presence elsewhere in the EU, like Revolut which announced plans to open offices in 19 European countries, the crypto sector is likely to maintain and expand its presence in the country which has a very well developed financial infrastructure.

Revolut, which develops online banking solutions, provides its clients with instant access to five cryptocurrencies, including BCH, and offers exchange services in its mobile app. Users can transfer digital coins between each other. Other Britain-based companies of note are Wirex and Cashaa. Wirex is the most popular crypto debit card issuer in Europe. Its platform lets you spend cryptocurrencies anywhere Visa is accepted through instant conversion to fiat and to withdraw cash at ATMs around the world. And Cashaa provides you with a U.K. current and euro bank accounts supporting both traditional and digital money operations.

Thanks to startups like these, crypto banking is becoming a viable alternative to traditional finance. And in the future, the troubles of the fiat system are likely to have a positive effect on cryptocurrencies, whose strengths stem from their decentralized nature. If you live in Britain, Europe or anywhere else, and you still haven’t entered the crypto space, you can do so safely and securely by acquiring your first coins at buy.Bitcoin.com. You can also freely trade your crypto assets on our noncustodial, peer-to-peer marketplace local.Bitcoin.com, with thousands of other users or try our recently launched trading platform, exchange.Bitcoin.com.

Do you expect the number of cryptocurrency users in the U.K. to increase after Brexit? Share your thoughts on the subject in the comments section below.

Images courtesy of Shutterstock.

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Swiss Bank Partners With Bitstamp to Enable BTC Funding and Withdrawals

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Swiss Bank Partners With Bitstamp to Enable BTC Funding and Withdrawals

Cryptocurrency exchange Bitstamp has partnered with a Swiss bank to allow the bank’s customers to fund their dollar-denominated accounts with BTC as well as withdraw funds in the cryptocurrency. Deposited coins are converted to USD. Withdrawals are converted to BTC and transferred to the crypto wallets linked to client accounts.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

The Partnership

Swiss Bank Partners With Bitstamp to Enable BTC Funding and WithdrawalsBitstamp announced on Friday that it has “partnered with Dukascopy Bank, one of the leading Swiss online banks, to enable crypto funding on their platform.” The exchange elaborated:

Dukascopy’s clients can now send bitcoins to their accounts and the crypto will be converted to US dollars, which they can use to trade on the Swiss FX Marketplace. Clients can also withdraw funds back to their cryptocurrency wallets in the form of bitcoins.

Swiss Bank Partners With Bitstamp to Enable BTC Funding and WithdrawalsGeneva-based Dukascopy Bank offers currency and precious metal (forex) trading to retail and institutional clients. Its website explains that the funding and withdrawals of BTC are offered through “crypto-fundable trading accounts,” adding that BTC is currently the only cryptocurrency supported.

Swiss Bank Partners With Bitstamp to Enable BTC Funding and Withdrawals

The bank explained that any BTC sent by clients to it will always be converted to USD. Bitstamp is responsible for exchanging fiat funds to BTC and back for the bank. “The proceeds of the BTC/USD conversion are credited in USD to the crypto-fundable client account,” the bank described, adding:

In case of withdrawal, the bank debits an amount of USD from the crypto-fundable client account, converts such amount into BTC at a current rate and transfers the bitcoins to the client wallet linked to his account.

“This partnership represents another step towards our goal of bridging the gap between crypto and traditional finance,” Bitstamp wrote. “It is further proof that our efforts in compliance and regulation continue to deliver results at a time of rapid maturation for the cryptocurrency industry.”

Dukascopy Bank’s Crypto CFD Offerings

This is not Dukascopy Bank’s first foray into the crypto space. It already provides contract for difference (CFD) “trading on price movements of cryptocurrencies, its derivatives or value estimations,” according to its website. Currently, only CFDs on BTC and ETH are available, both with a 33 percent margin requirement and a leverage ratio of 1:3.

Swiss Bank Partners With Bitstamp to Enable BTC Funding and Withdrawals

Dukascopy Bank’s website further details that customers with opened CFD positions do not own the underlying assets and the “price of cryptocurrency CFD varies significantly across different cryptocurrency exchanges.” The bank also noted that its CFD “prices on cryptocurrencies are unique and based on its ability to hedge Dukascopy positions with external counterparties.”

What do you think of the partnership between Dukascopy Bank and Bitstamp? Let us know in the comments section below.

Images courtesy of Shutterstock, Bitstamp, and Dukascopy Bank.

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