Ukraine passes "Virtual Assets Law" to reduce regulatory burden and accelerate market growth

Despite Russia withdrawing troops while also reportedly increasing troops, with Russian media accusing Ukraine's government forces of shelling eastern Ukraine, the situation does not seem to have brought Ukraine to a standstill or delayed domestic governance. On the 17th, the Ukrainian parliament passed the "Virtual Assets Law" on the second reading, with 272 out of 365 members of parliament supporting the bill.

Despite Russia withdrawing troops on one side while reportedly increasing them on the other, and Russian media accusing the Ukrainian government forces of shelling the east of Ukraine, the situation does not seem to have brought Ukraine to a standstill or delayed domestic governance. On the 17th, the Ukrainian parliament passed the "Virtual Assets Law" in the second reading, with 272 out of 365 members supporting the bill.

This law was proposed by Ukrainian President Volodymyr Zelensky, who suggested several amendments, including removing the Digital Transformation Ministry as a regulatory body, a proposal that was unanimously agreed upon by the members of parliament.

According to the version of the law approved based on Zelensky's suggestions, the "Virtual Assets Law" stipulates that the National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine (NBU) are the two main regulatory bodies for the crypto market. The NBU is responsible for supervising the turnover of virtual assets backed by currency valuables. The NSSMC will regulate other types of digital assets, including derivative financial instruments and regulated virtual asset service providers.

According to a report by Cointelegraph, Alex Bornyakov, Deputy Minister of the Digital Transformation Ministry in Ukraine, expressed strong support for the amendment to the bill, stating that "reducing the number of regulators can speed up the launch of the crypto market."

If all goes as planned, Zelensky is expected to sign and announce the bill within the next 10 days. Additionally, lawmakers will also introduce a bill amending the Ukrainian tax law to regulate "all issues related to the taxation of cryptocurrencies and other virtual assets."

Ukraine's "Virtual Assets Law" was introduced in May 2020 with the mission of determining the legal status of cryptocurrencies like Bitcoin. Due to the high cost of establishing a new digital asset regulatory body, Zelensky returned the bill to parliament for revision after multiple readings. The Digital Transformation Ministry was established in August 2019 and has been collaborating with top crypto industry players, including the world's largest crypto exchange, Binance.

While the situation between Russia and Ukraine remains in crisis, with Ukraine proceeding with such legislation, Russia is also not far behind, as they are working on formulating cryptocurrency regulations, with plans to release a draft of the cryptocurrency industry regulation on Friday.

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