Ukraine passes crypto law to make Bitcoin legal
The Draft Law on Virtual Assets is still awaiting President Volodymyr Zelensky's signature.
The legislation, which was originally crafted in September 2020, provides greater protections for investors and businesses alike against fraud. Ukraine's Minister of Digital Transformation, Mykhailo Fedorov, told the Kyiv Post that more locals would invest in Bitcoin if the cryptocurrency became legal and thereby safer. Ukraine is the latest in a string of nations that have moved to integrate Bitcoin into the economy.
Last 4 weeks:— Blockworks (@Blockworks_) September 8, 2021
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Panama ???? - Presented bill to legalize Bitcoin
El Salvador ???? - Adopted BTC as legal tender
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Ukraine's Bitcoin law received a nod from 276 members of Parliament on Sept. 8, which was close to 100% support. The law shouldn't come as too much of a shock considering President Zelenskyy's recent trip to Silicon Valley, where he met with investors and venture capitalists to tout Ukraine's digital economy with a view toward cooperation.
Before this bill, Ukrainians were largely given mixed signals on cryptocurrencies such as Bitcoin. Investors have been free to trade on cryptocurrency exchanges. At the same time, businesses, including trading platforms, were regarded as suspicious by the authorities. If anything, cryptocurrency businesses have been the target of “unjustified raids' in which equipment has been seized by Ukraine's law enforcement authority, which has been known to doubt the validity of digital assets, according to the Kyiv Post.
With the new law, there is greater regulatory clarity, but Ukraine is charting its own course and doing things differently than El Salvador. Ukrainians will not be permitted to use Bitcoin as legal tender. This role is reserved for the local fiat currency, the hryvnia.
What Ukraine is doing is paving the way for businesses and investors to use cryptocurrencies by 2022 with greater protection from fraud, the first step of which is the draft law. Crypto businesses will need to obtain a permit and will also be on the hook for paying taxes in Ukraine. Lawmakers must now green-light other supporting laws as well as make tweaks to the Tax Code and Civil Code.
The cryptocurrency community is emboldened as the world becomes increasingly crypto-friendly. However, Ukraine's law did little to boost the Bitcoin price, which remains down for the week and below the psychologically important $50,00 level.