Cryptocurrencies are now legal in Ukraine as President Zelenskyy signs Virtual Assets bill into law | The Financial Express

Cryptocurrencies are now legal in Ukraine as President Zelenskyy signs Virtual Assets bill into law

Cryptocurrencies were not illegal in Ukraine prior to the bill even as the latest announcement by the government doesn’t mention Bitcoin becoming a legal tender in the country unlike in El Salvador.

Cryptocurrencies are now legal in Ukraine as President Zelenskyy signs Virtual Assets bill into law
Ukraine’s Deputy Minister of Digital Transformation Alex Bornyakov tweeted that the crypto industry offers new economic opportunities. (Image: pixabay)

A month after Ukraine’s parliament passed a bill to legalise cryptocurrencies such as Bitcoin and Ethereum, the country’s President Volodymyr Zelenskyy has now signed it into law. The development has come amid millions of dollars in crypto donations received by Ukraine to fund its war efforts against Russia’s invasion. According to a statement released by Ukraine’s Ministry of Digital Transformation on Wednesday, the law “On Virtual Assets” creates conditions for the launch of a legal market for virtual assets in Ukraine. The new market will be regulated by the country’s National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine.

Importantly, cryptocurrencies were not illegal in Ukraine prior to the bill even as the latest announcement by the government doesn’t mention Bitcoin becoming a legal tender in the country unlike in El Salvador. Moreover, even without formal regulations, Ukraine had the fourth spot on Chainalysis’ 2021 Global Crypto Adoption Index after Vietnam, India, and Pakistan. The index measured the levels of crypto adoption among countries’ institutions, ordinary people, and focus on use cases related to transactions and individual savings.

Nonetheless, the new law will now enable foreign and Ukrainian cryptocurrency exchanges to operate legally and also banks to open accounts for crypto companies. The development was also announced on Twitter by the ministry.

The NSSMC will form and implement state policy in the field of virtual assets, determine the order of turnover of virtual assets, issue permits to virtual asset service providers, and will also regulate, supervise and financially monitor this area, the ministry added. Currently, the country’s Ministry of Finance is also “actively working to amend the Tax and Civil Codes of Ukraine to fully launch the market for virtual assets.”

Also read: Institutional investors pull money out of crypto funds after seven-week run of inflows

“This pave the way for crypto businesses to run smoothly under a regulatory ambit though Bitcoin is not yet recognized as legal tender. It is not surprising that they have legalized the crypto industry even amidst its standoff with Russia. The country has realized the effectiveness of blockchain technology when it sourced donations to help manage the conflict in crypto. This also means that Ukraine wants to project itself as the next big destination for crypto based talent to build their careers in,” Vikram Subburaj, CEO, Giottus Crypto Exchange told Financial Express Online.

The work on regulating cryptocurrencies in the country has been underway almost for two years. In fact, in September last year, Zelenskyy had rejected a previous version of the bill seeking changes to make NSSMC the crypto market regulator. The government had first introduced the revised version of the bill back in February last year.

Ukraine’s Deputy Minister of Digital Transformation Alex Bornyakov tweeted that the crypto industry offers new economic opportunities. He said the government will do its best to bring the bright new future closer as soon as possible. 

According to the ministry’s website, Ukraine has so far received $55 million in crypto donations since Russia began invading it last month. As per the data tweeted by Bornyakov on March 11, 2022, Ukraine has been able to supply 5,550 bulletproof vests, 4.10 lakh packed lunches, 500 helmets, 3,427 medicines, 60 walkie-talkies, 500 ballistic plates for bulletproof vests, 3,125 thermal imagers and optics to its army through money donated via crypto since March 1.

“The comments around cryptocurrencies in this story are by the respective commentator. Financial Express Online does not bear any responsibility for their advice. Please consult your financial advisor before dealing/investing in cryptocurrencies.”

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First published on: 17-03-2022 at 17:57 IST