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Even though the war between Ukraine and Russia has been going on for months, the Ukraine fintech industry keeps growing, and here is why.
4 reasons why Ukraine fintech industry keeps growing
Particularly in the finance industry, Ukrainians have frequently created market-leading businesses and solutions that have a beneficial social impact. The Ukrainian fintech sector is attempting to improve the country’s infrastructure and regulations despite the war’s obstacles so that it can draw reputable businesses and institutional investors from various backgrounds.
The Ukrainian market is valuable
Many investors undoubtedly believe that the nation’s IT sector is currently a risky investment. However, things continue to run as usual for local fintech companies. They have demonstrated their toughness even in hostile environments, and it’s astonishing that 90% of Ukrainian IT businesses are still hiring.
Volodymyr Zelenskyy, the president of Ukraine, signed a measure in March establishing the nation’s cryptocurrency regulatory framework. Although the measure forbids the use of digital assets as a method of payment, it aims to establish the right framework for a robust cryptocurrency market. Exchanges for cryptocurrencies can now apply for a license to operate legally in the nation. Crypto enterprises will be able to create accounts with banks and choose from a variety of licenses based on what they do.
The Ukrainian IT sector keeps growing
Nearly half of Ukraine’s total export services volume came from the IT sector, which saw export revenue of $3.2 billion in the first five months of 2022, a 27 percent increase over the same time in 2021. One of the key objectives of the Ukrainian government is to double the GDP contribution of the IT industry from its present 4% to 10% by 2024. The government’s support and the industry’s robust development together provide a clear message that the IT sector is ready for investment.
Global firms are supporting Ukraine
Another reason why the Ukraine fintech industry keeps growing is the fact that global firms are in support of the county. The Ukrainian Ministry of Digital Transformation unveiled Digital4Freedom earlier this month, a global effort that serves as the main conduit for charitable contributions from the tech industry to Ukraine. As a component of the global UNITED24 initiative, Digital4Freedom enables people all around the world to donate money toward the recovery of the nation’s economy. The program consists of nine initiatives that were submitted to 40 businesses, the vast majority of which have committed to assist with funding or technological solutions.
For instance, Amazon is apparently aiming to develop solutions for implementing artificial intelligence in courts and will reportedly spend over $100 million on cloud hosting services for Ukrainian state records. The cryptocurrency exchange Binance will formally join with Ukraine’s Ministry of Digital Transformation to provide educational programs in the domains of finance, IT, and web 3.
Recently, Meta established a $1.5 million aid initiative for the rehabilitation of the Ukrainian economy with the cooperation of the Ministry of Digital Transformation, assisting small- and medium-sized firms with a specialized training facility.
The Ukrainian economy is backed by many startups
Businesses in Ukraine anticipate a decline in the output of goods and services as a result of the conflict. Additionally, firm leaders forecast inflation and a depreciation of the hryvnia during the course of the upcoming year. Tech entrepreneurs in Ukraine are putting all of their efforts into growing the sector. They are positioned to serve as the cornerstones of a new generation of technology firms that will significantly boost the economy.
Despite the setbacks, fintech is growing
The Law of Ukraine on Payment Services (LPS), which this year was introduced by Ukrainian MPs, will improve the regulatory environment for the fintech industry, including for payment services. Additionally, the European Digital Finance Association welcomed the first non-EU member, the Ukrainian Association of Fintech and Innovation Companies (UAFIC) (EDFA). Both companies are working together to improve Ukraine’s fintech environment.
We think that the tenacity of Ukraine in the face of Russian aggression and the enormous expansion of the fintech industry despite the crisis have demonstrated why investors shouldn’t be hesitant to participate in the rapidly expanding sector. The industry is still growing in spite of the challenging circumstances in the nation.
We hope that you enjoyed this article on 4 reasons why Ukraine fintech industry keeps growing. If you did, we are sure that you will also enjoy reading our other articles, such as Zelenskyy legalizes cryptocurrency in Ukraine, or China signals willingness to support Russia in Ukraine.
