The Parliament of Ukraine approved a law to legalize and regulate cryptocurrency. This bill was introduced in 2020 and is currently headed to President Volodymyr Zelensky desk.
The bill “On Virtual Assets” was adopted by the Parliament of Ukraine on September 8. It legalizes cryptocurrency in Ukraine for the first time. This legislation is based on standards that were developed by the Financial Action Task Force (FATF).
Official documentation shows that 276 Ukrainian legislators voted in support of the bill.
In recent months, the use of cryptocurrency in Ukraine has increased sharply. The law after approval from Ukraine parliament reaches President Volodymyr Zelensky desk, if signed by President Volodymyr Zilensky, the bill will protect digital asset owners and crypto exchanges against fraud and illicit activities. It will also provide clear guidance to other crypto companies that operate in the country.
According to a spokesperson for Ukraine’s Ministry of Digital Transformation, the government plans to open crypto markets for investors and companies by 2022.
While crypto currencies become legal in Ukraine, they don’t have the status of legal tender, and cannot replace Hryvnia, the country’s national currency. The law only allows the trade and exchange of digital assets via regulated exchanges within the country.
Ukraine digest, Kyiv Post Writes:
“Although virtual assets are now legitimate in Ukraine, Ukrainians cannot use them as a means of payment or exchange for goods or services — only the official national currency, the hryvnia, has this power. However, Ukrainians can own, exchange and trade cryptocurrencies using local or foreign exchange platforms registered in Ukraine.
The law on virtual assets allows crypto businesses to work officially in Ukraine and pay taxes here. To register a crypto business, a company needs to prove that it is transparent and has an excellent reputation. The permission to start a business costs over $3,100. To prevent profit laundering and financial terrorism, crypto businesses have to declare their activity to the state.”
Mykhailo Fedorov, Ukraine Minister for Digital Transformation said:
“Only a few countries in the world have legalized crypto assets — Germany, Luxembourg, Singapore. Ukraine will be one of them. Favorable conditions will allow companies to register in Ukraine, rather than abroad. The entrepreneurs will pay taxes to the budget, but will be protected by the state”.
The Ministry of Digital Transformation of Ukraine, National Bank of Ukraine, and National Securities Commission will be the main regulators of the Ukrainian crypto market.