Ukraine legalised cryptocurrencies on Thursday, despite rising tensions with Russia, which have roiled global markets in recent weeks owing to fears of a larger conflict, with more than 100,000 Russian troops stationed near the Ukrainian border.
Bitcoin is officially legal in Ukraine after the country’s parliament passed a law in a final reading that complies with the President’s guidelines. The country, however, has not made bitcoin a legal tender.
The new law provides an additional chance for the country’s economic progress. According to Mykhaylo Fedorov, Ukraine’s minister of digital transformation, foreign and Ukrainian crypto firms would operate lawfully. Ukrainians will have easy and safe access to foreign markets for virtual assets.
As stated in an official statement, the Ukrainian parliament passed the new Law on Virtual Assets on Thursday with around 270 votes. The bill lays out the rules that Bitcoin service providers like exchanges must follow and determine the penalties for breaking the law’s terms. It also establishes that the country’s National Securities Commission would monitor the cryptocurrency market.
According to the statement, the Securities Commission of Ukraine will be in charge of giving licenses to Bitcoin and cryptocurrency service providers and financial monitoring and market supervision.
According to a research, bitcoin payments to Ukrainian volunteer and hacker organisations skyrocketed in 2021, with some of them supplying government soldiers with weaponry.
Ukraine proposed a similar cryptocurrency bill in September. Still, President denied it the following month, claiming that it wouldn’t be possible for the country to create a separate regulatory agency for cryptocurrency and Bitcoin.
President Zelensky then sent the law back to the Ukrainian parliament and recommended that existing regulators oversee the booming sector. Parliament has now taken his proposals into account and passed the amended bill.
According to Serhiy Tron, creator of White Rock Management and the Parea Foundation worldwide fund, the Law on Virtual Assets is essentially a framework law that requires considerable future adjustments, such as amendments to the tax code. The paper sent a solid message to the international community, as the National Bank of Ukraine declared digital currency a monetary substitute with no real value.
According to Tron, Ukraine’s Ministry of Digital Transformation wishes to make the country a global leader in cryptocurrency and Bitcoin, which the new law raises the possibility. The country expects a quick inflow of crypto investors worldwide by developing a high-tech, unique cryptocurrency market with transparent laws, he added.
The Bitcoin law in Ukraine allows the peer-to-peer currency to move out of the “gray” zone by clearly defining legislation covering how the asset should be treated lawfully and how institutions should act regarding guarantees and investor protection.
According to Tron, bitcoin exchanges can also operate under formal guidelines, and citizens’ assets will be better safeguarded against fraud or misappropriation by service providers, such as custodians.
According to Tron, adopting the Law on Virtual Assets “clearly signals to the world community that cryptocurrency is legalized in Ukraine.” The ability to conduct business legally in Ukraine will encourage crypto-investors worldwide to visit the country.