The Ukraine parliament announced on Thursday that it passed a bill to legalise cryptocurrencies , thus making the use of digital assets much easier in the country. The Ukraine parliament disclosed that it had approved the passage of the law of Ukraine on Virtual assets with 272 votes.
After the passage, Mykhailo Fedorov, the Ukraine Deputy Prime Minister and the Minister for Digital Transformation, stated: “This will legalize crypto exchanges and cryptocurrencies, and Ukrainians could protect their assets from possible abuse or fraud.”
The passage paves the way for the preparation of a framework for the regulation and management of digital assets like Bitcoin. The new version of the Law on Virtual Assets puts cryptocurrency regulation under the oversight of the National Commission on Securities and Stock Market, a top government agency responsible for conducting the supervision of participants of Ukrainian capital markets.
However, the bill does not recognize cryptocurrencies like Bitcoin as legal tender. Ukraine clarified that it has not followed the route of El Salvador, which legalized Bitcoin as an official currency in September last year. Ukraine said that the new law will offer reassurance to businesses operating in what was in the past a legal grey area.
“Market participants will receive legal protection and the opportunity to make decisions based on open consultations with government agencies,” Fedorov elaborated.
Government officials expect that the new law will attract more foreign investment into Ukraine’s growing cryptocurrency market.
Becoming the Crypto Hub of the World
In March 2020, the Ukrainian National Agency for the Prevention of Corruption (NAPC) defined digital currencies as a type of intangible asset. As a result, the agency expected Ukrainian nationals to declare their crypto holdings, similar to any other intangible assets. Ukraine’s guidance on digital currencies followed similar clarification by Germany’s Federal Financial Supervisory Authority (BaFin), which considers crypto assets as financial instruments.
In September last year, Ukraine put a paperless regime in place as public authorities declared that they would no longer demand paper documents from Ukrainians. The country’s goal was to develop the most comfortable and user-friendly country in the world for the next 50 years. The country started contemplating building a digital economy and becoming a top jurisdiction for cryptocurrency and blockchain firms. It was during that month when Ukraine began taking steps to grant legal status to virtual assets.
