Ukraine is the fifth country in as many weeks to set basic ground rules for the cryptocurrency market, indicating that governments all around the world are recognizing bitcoin as a legitimate currency.
The Ukrainian Parliament passed a measure legalizing and regulating bitcoin in a near-unanimous vote. The law was introduced in 2020 and now, Bitcoin is officially legal in Ukraine. This happened after the country’s parliament passed a law that complies with the president’s recommendations in its final reading. Bitcoin, on the other hand, is not a legal tender in the country.
“The new law is an additional opportunity for business development in our country. Foreign and Ukrainian crypto companies will be able to operate legally, and Ukrainians will have convenient and secure access to the global market for virtual assets,” Mykhaylo Fedorov, Ukrainian Minister of Digital Transformation, said in a statement.
According to an official statement, the Ukrainian parliament ratified the new Law on Virtual Assets on Thursday with more than 270 votes. The bill lays out the rules that Bitcoin service providers, such as exchanges, must follow, as well as the penalties for breaking the law’s terms. It also establishes that the country’s National Securities Commission would oversee the cryptocurrency market.
The Securities Commission of Ukraine will be in charge of giving permits to Bitcoin and cryptocurrency service providers, as well as market supervision and financial monitoring, according to the statement.
Ukraine submitted a similar cryptocurrency bill in September, but President Volodymyr Zelensky vetoed it the following month, claiming the country couldn’t afford to set up a separate regulatory agency solely for Bitcoin and cryptocurrency.
The law was then returned to the Ukrainian parliament, along with President Zelensky’s recommendation that current regulators regulate the booming business. The amended measure has now been passed by parliament, which has taken into account his recommendations.
Legislation favors entrepreneurship, invites capital
“The Law on Virtual Assets is primarily a framework law that requires future considerable improvements, such as changes to the tax code,” said Serhiy Tron, the founder of White Rock Management and the Parea Foundation worldwide fund. “However, because the National Bank of Ukraine publicly said that digital currency is a monetary surrogate with no actual value,’ the document has become a significant signal to the international world.”
Tron emphasized that Ukraine’s Ministry of Digital Transformation wants to make the country a global leader in Bitcoin and cryptocurrency, which the new law makes possible.
“By establishing a high-tech, innovative cryptocurrency market with clear rules, the country anticipates a rapid influx of crypto investors from around the world,” he continued.
The Bitcoin law in Ukraine allows the peer-to-peer currency to move out of the “gray” zone by establishing clear-cut legislation that covers how the asset should be treated legally as well as how institutions should act in terms of investor protection and reassurance.
“Bitcoin exchanges will now be able to operate under defined rules, and individuals’ money will be better safeguarded against fraud or misappropriation by service providers, such as custodians,” Tron said.
“Adopting the Law on Virtual Assets sends a strong message to the rest of the world that cryptocurrency is legal in Ukraine,” Tron told Bitcoin Magazine. “The ability to lawfully conduct business in Ukraine will entice crypto-investors from around the world to visit our nation.”