More and more governments recognize the staying power of cryptocurrencies such as Bitcoin. Ukraine is the latest country to join the list of countries legalizing cryptocurrencies. Just this week, El Salvador became the first country to adopt Bitcoin as its legal tender. Two weeks ago, Cuba passed a law that recognizes and regulates cryptocurrencies on the grounds of “social and economic benefits.” Panama is also drafting new cryptocurrency regulations.
In an almost unanimous vote, the Ukrainian Parliament passed a law to legalize cryptocurrencies. Earlier last month, there were reports that a new cryptocurrency-related bill would allow payments in cryptocurrencies. According to a person familiar with the matter, as of that time, the bill was preparing for its second reading in Parliament. Local report.
However, on Wednesday, the Ukrainian Parliament passed a draft law “on virtual assets”. Thus, for the first time, cryptocurrency is legally recognized in the country.this law It will take effect after legislators approve the amendments to the national tax law on the taxation of cryptocurrency transactions. Despite this, the Ukrainian legislature has not yet voted on these changes.
The news was released after the Ukrainian President Volodymyr Zelensky signed another law related to digital currency, the Payment Services Law. The law officially allows the Central Bank of Ukraine to issue central bank digital currency, the digital hryvnia.
What the law says
Unlike El Salvador’s move to adopt Bitcoin as legal tender, Ukraine’s encryption law clearly stipulates that cryptocurrency does not constitute legal tender. However, this shows that the country prefers Bitcoin.
The new law recognizes virtual assets as secured and unsecured intangible commodities. However, cryptocurrency is not accepted as a legal payment method, and it is not allowed to exchange it for other goods or services.
“Ukrainians can also declare their income through virtual assets,” said Anastasia Bratko of the Ministry of Digital Transformation. She added that the law “guarantees judicial protection of the rights of virtual asset owners.”
The law stipulates that the term “financial virtual assets” must be issued by a registered entity. Encryption market participants will be able to independently determine the value of virtual assets, open bank accounts to settle transactions, and seek judicial protection for related rights. Like traditional financial institutions, service providers must comply with the country’s anti-money laundering regulations and prevent the use of their platforms to fund terrorism.
The history of encryption in Ukraine
Ukraine’s encryption laws used to be a bit gray. Even before the legislation, cryptocurrency trading was not illegal in the country. However, there is no law surrounding it. Locals are allowed to buy and exchange virtual currencies, but companies and exchanges engaged in cryptocurrency transactions are often closely monitored by law enforcement agencies.
Two years ago, the Ukrainian Ministry of Digital Transformation was established. It has become very active in the field of encryption. It worked with Binance to jointly develop new encryption rules.Government’s online portal Report The Ministry of Digital Transformation cooperates with the cryptocurrency exchange Currency.com, a service of Belarus. It is said to be the first in the Commonwealth of Independent States (CIS) region to provide support for cryptocurrencies, fiat currencies and tokenized assets Of regulated exchanges.
Ukrainian authorities have always taken a combative stance on illegal encryption activities.
Total crypto market at $2.13 Trillion | Source: Crypto Total Market Cap from TradingView.com
In August, the Ukrainian Security Service (SBU) Blocked A network of “secret cryptocurrency exchanges” operating in the capital Kiev. The SBU claims that these exchanges facilitate money laundering and provide anonymous transactions.
Related Reading | Ukrainian security services shut down illegal cryptocurrency exchanges
The current authorities maintain a positive attitude towards the country’s growing encryption industry.According to this report, the country plans to open the cryptocurrency market to businesses and investors by 2022 Kiev post.
During an official state visit to the United States last month, Ukrainian President Volodmir Zelensky, visit Top investors and venture capital funds actively cooperate with Ukraine. He talked about Ukraine’s emerging “virtual asset legal innovation market” as a selling point of investment. The Minister of Digital Transformation Mykhailo Fedorov also stated that the country is modernizing the payment market so that its national bank can issue digital currencies.
Featured image from PYMNTS.com, Chart from TradingView.com