Ukraine has formally legalized Bitcoin and other cryptocurrencies after receiving over $100 million in crypto donations during its war with Russia.
Ukraine’s leader President Volodymyr Zelensky has signed a bill that officially makes cryptocurrencies legal in his besieged country. According to an official statement published by the Ministry of Digital Transformation, the new law allows foreign and Ukrainian crypto exchanges to operate legally in Ukraine in what is being seen as a vital step to developing a legal market for virtual assets in the country.
The law also creates a regulatory framework for an open crypto market in Ukraine for the first time. The law states:
“The signing of this law by the president is another important step towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine.”
A legal framework for Ukraine’s burgeoning crypto industry
Even though cryptocurrencies haven’t technically been illegal in Ukraine, digital assets have operated in what you could call a gray area. The country has received over $100 million in crypto donations from the global community during its ongoing war with Russia, leading to its official adoption of crypto assets.
Before enacting the law, neither companies nor individuals could own or trade cryptocurrencies in the market. A recent surge in crypto crime and money laundering in Ukraine and Eastern Europe in recent years led to the nation’s government cracking down on the industry.
The new law sets forth a legal framework for Ukraine’s burgeoning crypto industry. It taps the National Bank of Ukraine and its National Commission on Securities and Stock Market to serve as regulators. It also paves the way for more laws and a tax code on crypto, which, hopefully, will further legitimize the crypto industry in Ukraine.
Shaping and pursuing a policy in the field of virtual assets
The digital ministry said via Twitter that Ukraine’s National Commission would regulate the market on Securities and the Stock Market. Exchanges will be able to operate legally, and banks will open accounts for them. According to a February 17 announcement by the government, the ministry was tasked with:
“Shaping and pursuing a policy in the field of virtual assets; determining the order of circulation of virtual assets; issuing permits to virtual asset service providers; and carrying out supervision and financial monitoring in this area.”
Ukraine is currently among the top 5 countries globally for cryptocurrency usage, making the law’s approval somewhat overdue. Ukraine’s initiative comes soon after Dubai established its Virtual Asset Regulatory Authority and US President Joe Biden signed an Executive Order on crypto industry oversight.
There has been fear that crypto could weaken the West’s economic punishment against Russia following its invasion of Ukraine last month. On the contrary, cryptocurrencies have been overwhelmingly beneficial to Ukraine during the conflict, with the nation receiving over $100 million in crypto donations in less than a month. The country is even preparing to launch an NFT collection about the Russian war following a canceled airdrop.