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Despite the volatility of the crypto market, the adoption of digital currencies continues to grow worldwide. Ukraine joins the small but growing list of countries that legalized Bitcoin (BTC) and other cryptos.
Regulatory uncertainty has finally been lifted from Ukraine’s crypto market as its Parliament unanimously voted a law that legalizes and regulates cryptocurrency, according to CNBC. The bill, which was first set into motion in 2020, is now being forwarded to President Volodymyr Zelenskyy for signing.
Parliament’s support of the bill is seen as a positive development in the country’s digital assets industry, where authorities have previously shown a combative against cryptos by “often confiscating expensive equipment without any ground” and raiding crypto-related businesses in the past. For instance, the Security Service of Ukraine (SBU) blocked a network of exchanges in Kyiv in August, claiming that the “clandestine cryptocurrency exchanges” facilitated money laundering.
The bill also introduced formal definitions for common terminologies such as private keys, digital wallets, and virtual assets. Once signed by the president, it will provide certain protection to Bitcoin and crypto owners against fraud.
It will also allow Ukrainians to own, buy and sell cryptocurrencies via local and foreign exchanges registered in the country, according to the Kyiv Post. However, they can’t use crypto as a means of payment as only the national currency, hryvnia, have that power.
Ukraine’s setup differs from that of El Salvador, which adopted Bitcoin as a legal tender. This makes BTC on par with the U.S. dollar and that crypto can be used as payments for goods and services.
However, Ukraine’s law on virtual assets allows crypto-related businesses to legally operate in the country. They just need to show transparency and must declare their activities to prevent terrorist financing and money laundering.
“Only a few countries in the world have legalized crypto assets — Germany, Luxembourg, Singapore. Ukraine will be one of them,” Mykhailo Fedorov, Ukraine’s Minister of Digital Transformation, said. He added that once cryptocurrencies are made legal, it would be safer for investors and could usher in more investments in the sector.
