Legalization of cryptocurrency in Ukraine
While the Bank of China had declared that all cryptocurrencies transactions are illegal, in Ukraine virtual currency has been legalized.
Verkhovna Rada has signed law #3637 “About virtual assets”. The law has been supported by 272 parliamentarians.
Mykhailo Fedorov announced this on his Twitter on 17 February 2022.
Earlier in October 2021, President of Ukraine Volodymir Zelenskiy vetoed the document and returned it to Rada with 21 propositions. The main point was in advising that state authorities should regulate the crypto market.
What does the law on virtual assets define?
- The law should release the legal market of virtual assets in Ukraine. The regulator of the market will be the National commission of stocks markets.
- The national commission will determine the circulation of virtual currencies and provide permission for service suppliers. It is also will supervise and provide financial monitoring.
- The Ministery of digital is already working on the necessary changes in Taxes and Civilian law books for the complete launch of the virtual assets market.
What changes the law on the legalization of cryptocurrency?
This law is basic and it determines the legal status of virtual assets so it provides jurisdictional protection for users. Ukrainian and foreign crypto markets will work in Ukraine, and the banks will open accounts for the crypto companies. The State Treasury will receive extra income from crypto companies, and that is very important.
“Foreign and Ukrainian crypto companies will be able to work legally and Ukrainians will acquire comfortable and secured access to the world market of virtual currencies. Market players will acquire the law protection and opportunities to make decisions according to open consultations with the state. There will be an open way of investment into the new class of assets”, – said Mykhailo Fedorov.
To be short, because of this law the crypto owners in Ukraine will be able to exchange the assets, include them in tax declarations, open blockchain businesses, and use cryptocurrencies in everyday life in a legal way.
The issue of regulation of cryptocurrency.
In 2021, the most controversial question was the creation of a new regulator on the Ministery of the digital base. The Ministery of finance had criticized this proposal because it will require extra funds.
Besides, there is no experience in financial markets regulation. Also, it is a question of securing the consumer rights, because the Ministery of digital has no right to work with consumers’ complaints.
Verkhovna Rada accepted the proposition of Volodymir Zelenskiy and made the National commission an assets regulator.
The main president’s argument was that that is how the crypto market is regulated in main world jurisdictions. For example, the USA regulator is SEC, the German regulator is BaFin and Britain is FCA.
“ The decision to refuse the creation of an extra regulator will let to avoid the risk of “regulator arbitration” when few state structures do the same work.” – said Roman Suljik.
Cryptocurrency during the war.
“Crypto-assets became the powerful tool for involvement extra finance to Armed Forces of Ukraine. The Crypto foundation of Ukraine has collected more than $54 million in three weeks.” – wrote Fedorov in his telegram channel.
Global cryptocurrency. Statistics.
Chainalysis investigated that:
In 2020 Ukraine entered the top ten countries in crypto earnings.
In the summer of 2021 Ukrainians earned $400 million on the bitcoin selling and became 10th among 25 countries.
The company reported that Ukraine has the biggest amount of crypto transactions.
The leaders of January 2022 were Vietnam, India, and Pakistan, but in the previous year, the leaders were the USA, China, and Japan.
Ukraine took 4th place among the countries where cryptocurrency is very popular.
For investigation analytics studied the data of transactions in 154 countries.