On Ukraine’s Kuna market, USDT premiums are skyrocketing

The last time USDT premiums on Kuna soared thus dramatically was in 2020, during the early phases of the COVID-19 pandemic.

The price of Tether’s USDT stablecoin rose to 36.97 Ukrainian hryvnia (UAH) ($1.23) on Ukraine’s Kuna exchange on Thursday, despite the ongoing Russian invasion. In the last 24 hours, the overall trading volume of all cryptos on the exchange was around $4.4 million.

Mid-market prices from foreign exchange data provider XE indicated that the UAH currency had only risen to a maximum of 29.89 per US dollar during the same time period. To put it another way, the USDT conversion rate was substantially greater than ordinary UAH/USD trades.

The USDT is theoretically pegged to the US dollar at one-to-one. The UAH/USDT trading pair is now valued at 31.89 on Kuna, compared to the UAH/USD exchange rate of 29.80 at the time of posting. This implies a 6.55 percent implied premium for USDT. In comparison, other centralized exchanges, including as Binance’s worldwide platform, are now trading USDT at its theoretical peg. However, according to data from Binance Ukraine, its USDT listing is trading at a premium of more than 7% to the Ukrainian hryvnia.

The National Bank of Ukraine said earlier on Thursday that it had set the UAH’s foreign exchange rate, banned cash withdrawals from banks, and suspended the issuance of electronic money (fiat currencies in digital form). When a country establishes its currency’s exchange rate, a black market emerges where customers trade foreign currencies at values that reflect current economic conditions.

Kuna founder Michael Chobanian, who also serves as president of the Blockchain Association of Ukraine, stated in a video posted on Thursday that the exchange is running regularly and that banks are still operational despite the outages. Chobanian described his country as being in “full-time war” and announced the creation of a cryptocurrency fund to aid organizations assisting the Ukrainian Armed Forces and administration in their resistance to Russian invasion. “Let us hope for peace,” Chobanian replied, “but if you want peace, you must prepare for battle.”

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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