5 reasons why the Ukrainian fintech sector is growing despite the war – TechCrunch
Ukrainians often have has pioneered market-leading companies and created products that have a positive impact on society, especially in the fintech sector.
Despite the obstacles of war, the Ukrainian fintech community is working to create better infrastructure and regulation for the country, which can attract valuable companies and institutional investors from different backgrounds.
It’s a valuable market
I’m sure many investors think the country’s IT sector is a risky investment right now. But it’s still business as usual at fintech companies here. They have proven their resilience even in times of war, and impressively, 90% Ukrainian tech startups are still hiring.
Last March, Ukrainian President Volodymyr Zelenskyy signed a bill to establish a regulatory framework for cryptocurrency in the country. Although the bill does not allow you to use digital assets as a form of payment, it seeks to create appropriate conditions to establish a robust cryptocurrency market.
Cryptocurrency exchanges can now claim a license to operate legally in the country. Banks will be able to open accounts for crypto companies, which will be able to opt for different licenses depending on what they are doing.
Ukrainian IT sector continues to grow
In the first five months of 2022, Ukraine’s IT sector generated approximately $3.2 billion in exports, 27% more than the same period in 2021, and accounting for almost half of the total volume of exports. country’s export services.
One of the main goals of the Ukrainian government is to increase the share of the IT sector in the country’s GDP from the current 4% to 10% by 2024.
Government support and strong growth together are a strong signal of the IT industry’s maturity for investment.
Global finance and technology companies support Ukraine
Earlier this month, Ukraine’s Ministry of Digital Transformation introduced Digital4Freedom – a global initiative that is the leading source of charitable donations for tech companies to support Ukraine.
Digital4Freedom is part of the global UNITED24 effort and enables anyone around the world to contribute financially to restoring the country’s economy.
The program consists of nine projects presented to 40 companies, the vast majority of which have agreed to help with monetary contributions or technological solutions.
Amazon, for example, reportedly provides more than $100 million in cloud hosting services for Ukrainian state registries and plans to develop solutions to deploy artificial intelligence in courts.
The Binance crypto exchange will become an official partner of the Ministry of Digital Transformation of Ukraine to offer educational projects in the fields of IT, web3 and finance.
Meta, with the support of the Ministry of Digital Transformation, recently launched a $1.5 million aid program for the recovery of the Ukrainian economy, helping small and medium-sized businesses with a specialized training center.
Startups are an integral part of the Ukrainian economy
Ukrainian companies expect a reduction in the production of goods and services due to the war. Moreover, company executives predict that the next 12 months will bring inflation and a devaluation of the hryvnia.
Ukrainian tech startups are devoting their efforts to elevating the industry to new heights. They are set to become the fundamental pillars of a new layer of technology companies that will add significant value to the economy.
Fintech is growing rapidly despite setbacks
This year, Ukrainian lawmakers introduced the Law of Ukraine on Payment Services (LPS), which will provide a better regulatory environment for the fintech sector, including for payment services.
Additionally, the Ukrainian Association of Financial Technology and Innovation Companies (UAFIC) has become the first non-EU member to join the European Digital Finance Association (EDFA). The two organizations are collaborating to strengthen the fintech landscape in Ukraine.
I think Ukraine’s resilience in the face of Russian aggression and the tremendous growth of the fintech landscape despite the crisis have proven that investors should not hesitate to invest in this growing sector.
Despite the country’s difficult situation, the industry continues to develop. By attending many fintech conferences and events, I meet investors from all over the world interested in Ukrainian companies. All this tells us that the prospects for fintech in Ukraine are good and now is the right time to invest in it.