Ukraine becomes the latest country to legalise Bitcoin and cryptocurrencies
Ukraine’s parliament has adopted a new law that legalises and regulates cryptocurrency and other virtual assets like tokens.
The bill was passed in a near-unanimous vote on Wednesday and will now need to be signed by President Volodymyr Zelensky.
Ukraine is the fifth country in as many weeks to set up ground rules for digital currencies following El Salvador’s move to adopt Bitcoin as legal tender.
What does the bill change?
But Ukraine has not gone as far as El Salvador, which accepts Bitcoin as an official form of payment alongside US dollars.
According to the Ukrainian draft bill, the law will regulate “legal relations arising in connection with the turnover of virtual assets in Ukraine, defines the rights and obligations of participants in the virtual assets market, the principles of state policy in the field of virtual assets”.
Put simply, the law will protect the owners of virtual assets and exchange platforms from fraud.
Cryptocurrencies in Ukraine have long been in a grey area, being neither legal nor forbidden due to a lack of existing laws that defined them and their usage.
El Salvador is hedging its bets on Bitcoin and accepts the crypto as legal tender. MARVIN RECINOS/AFP
While buying and exchanging cryptos was allowed, local courts could not protect people in cases of fraud or if something went wrong.
According to the Kyiv Post newspaper, authorities have typically regarded digital cash and cryptos as a “scam” and have raided crypto-related businesses and even confiscated equipment “without any grounds”.
Ukraine’s crypto future
The draft law may also determine how Ukraine will regulate cryptos in the future. The country plans to open up the cryptocurrency market to businesses and investors by 2022, a spokesperson from the Ministry of Digital Transformation told the Kyiv Post.
Ukraine’s Minister of Digital Transformation Mykhailo Fedorov also recently said the country was modernising its payment market so that its National Bank could issue digital currency.
There is a growing number of governments trying to regulate cryptocurrencies. Besides Ukraine and El Salvador, Cuba and Germany have also made strides.
Panama could be the next country to regulate cryptos as it is currently considering a draft law.
Ukraine legalizes cryptos
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Ukraine Has Legalized Bitcoin
The Ukrainian Parliament passed a law that legalizes and regulates bitcoin in the country, providing official clarity on the asset which was not previously clear.
Today, the Ukrainian Parliament passed a law that legalizes and regulates bitcoin in the country. The bill drafted in 2020 passed with a total of 276 lawmakers supporting the law, and only six against it.
The main purpose behind this bill seems to provide clarification on the asset and protect those who own bitcoin, as it was not previously legal or illegal in the country. Though not illegal, Ukrainian law enforcement agencies treated bitcoin and other virtual currencies as a scam, resulting in bitcoin businesses getting raided, according to Kyiv Post.
Now that this bill is passed, courts can now properly protect individuals and businesses, since it provides tax clarity and officially allows bitcoin businesses to operate within the country. It also sets some guidelines for how Ukraine may try and regulate bitcoin more in the future.
This bill gives the citizens “permission” to own and trade bitcoin and other cryptocurrencies on exchanges. The bill also gives clarity on wallets and what private keys are.
The Parliament is expected to pass and amend their tax and civil codes before the end of the year to officially “open the market” for businesses and investors, according to a Ministry of Digital Transformation spokesman who spoke to the Kyiv Post.
It is important to note that even though bitcoin is now legal in Ukraine, that does not mean that BTC is legal tender in the country. That will require a whole other bill for that to happen in the future.
This is great news and definitely a step in the right direction towards the country eventually adopting a full on bitcoin standard similar to El Salvador. One important thing to note here is that for bitcoin to fully thrive in a country, it’s important not to stamp it with too many laws or regulations, which would end up stifling innovation. Bitcoin is currently very nascent and seems to be on its way to becoming the world reserve currency — it would be a shame to see countries not capitalize on the opportunity at hand because of over-regulation.
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