Ukrainian Parliament passes crypto bill to eliminate regulatory discrepancies and safeguard asset security

Today, the Ukrainian parliament passed a second reading of a cryptocurrency asset bill drafted in 2020, legalizing and regulating cryptocurrency assets in the country. In yesterday's (8th) vote, 276 members of parliament supported the bill, while 6 opposed it.

Purpose and Substantial Help of the Law

The main purpose of this law is to clarify the cryptocurrency assets held by the people and protect them from threats by law enforcement agencies. Prior to the passage of this law, cryptocurrencies were neither legal nor illegal. According to the Kyiv Post, "Ukrainian law enforcement agencies have treated virtual currencies as a scam, often conducting raids on businesses and confiscating expensive equipment without any legal basis."

The law passed yesterday is crucial for the development of the cryptocurrency industry in Ukraine as it provides tax clarity and formally allows businesses related to the cryptocurrency industry to operate domestically, enabling the courts to better protect individuals and businesses.

Although cryptocurrency assets are now legal in Ukraine, Ukrainians cannot use them as a means of payment to exchange goods or services; only the official currency, Hryvnya (UAH), has that power. However, Ukrainians can hold, exchange, and trade cryptocurrencies through local or foreign exchanges registered in Ukraine.

The Ukrainian Ministry of Digital Transformation stated:

It is expected that the Parliament will amend tax and civil laws by the end of the year to formally "open the market" to businesses and investors.

High Demand for Cryptocurrency in Ukraine

Due to longstanding issues of government corruption, asset seizures, and low trust in banks, many Ukrainians have turned to using cryptocurrencies to protect their assets. According to Chainalysis data, Ukraine ranks fourth globally in cryptocurrency adoption.

With cryptocurrencies now becoming legal and open in Ukraine, it is expected to have a positive impact on the country's future development. Deputy Minister of Digital Transformation Oleksander Bornyakov also stated:

The passage of specialized legislation will increase Ukraine's attractiveness to foreign funds, serving as a strong driver for Ukraine's development in the cryptocurrency field.