Ukraine is Now the Fifth Country to Legalaize and Regulate Cryptocurrencies

Photo by Maksym Tymchyk On Unsplash - Ukraine
Photo by Maksym Tymchyk On Unsplash - Ukraine

Ukraine is now the latest and the fifth country to legalize and regulate cryptocurrencies such as Bitcoin. In a vote, the Ukrainian Parliament approved a law that legalizes and regulates cryptocurrency. The bill was set in motion in 2020 – and heads to the desk of President Volodymyr Zelenskyy.

Before the bill, Ukrainians were able to and exchange digital currencies. However, companies that trade crypto was under tight watch by law enforcement and regulators. According to the Kyiv Post, the Ukrainian government wasn’t very comfortable with cryptocurrencies, and even regarded it as a “scam,” raiding crypto-related businesses, and “often confiscating expensive equipment without any grounds.”

For instance, the Security Service of Ukraine (SBU) blocked a network in August called “clandestine cryptocurrency exchanges”. The Security Service of Ukraine argued that these exchanges were making money laundering easier for criminals since they provide anonymous transactions. 

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Ukraine’s case is different than El Salvador’s

Nonetheless, unlike El Salvador’s move to adopt Bitcoin as a legal tender, Ukraine’s new law doesn’t allow Bitcoin as a payment method and doesn’t make it as important as the country’s national currency hryvnia. Still, Thursday’s vote by the former nuclear power is part of a wider push by Kyiv to lean into bitcoin.

The country plans to open the cryptocurrency market to businesses and investors by 2022 according to Kyiv Post. On an official state visit to the U.S. last month, Zelenskyy spoke of Ukraine’s budding “legal innovative market for virtual assets” as a selling point for investment. 

Meanwhile, the Minister of Digital Transformation Mykhailo Fedorov said the country was modernizing its payment market so that its National Bank would be able to issue digital 

“Ukraine’s improved legal status for bitcoin is a laudable symbolic measure that we progress towards a world that respects individual rights universally,” said Rubin, CEO of bitcoin R&D lab Judica. “But it is only symbolic — bitcoin seeks neither permission nor forgiveness in its mission to protect persecuted communities from unjust governments.”