Ukraine's New Bill Will Allow the Use of Cryptocurrencies

A Ukraine's government official revealed that local residents will be able to legally keep, exchange, and spend cryptocurrencies once the new virtual assets law is adopted. The new legislation is likely to lower taxes for ukrainians and create conditions for new services. 

The legislation will make virtual assets "a completely legal and common phenomenon for the government and the society," Ukraine's Deputy Minister of Digital Transformation, Oleksandr Bornyakov, said in an interview.

The official expects to also see a whole new market for services allowing coins to be stored, exchanged, and used in payments. Although the draft states that cryptocurrencies are not a means of payment in the country, it will be legal to pay with crypto through an intermediary providing instant conversion to Ukrainian hryvnia. The same currently applies to foreign fiat currencies like the U.S. dollar that can be spent through a bank card, for example.

However, the legislation does not necessarily mean cryptocurrency exchanges can provide service without any restrictions. Still, they have to acquire permits from the authority and will be checked by regulators. 

According to Oleksandr Bornyakov, foreign-based trading platforms, for instance, will not be required to register as a legal entity in the East European nation. They'll only be obliged to meet certain authorized capital requirements. 

He also remarked:

We understand that the business with virtual assets is global, so if we set conditions for registration in Ukraine, crypto exchanges will not enter our country.

The crypto law provides for the establishment of a new regulatory body – the National Service for Regulation of Virtual Assets. This will be a fully independent state agency that will issue permits for crypto companies operating in Ukraine. Existing regulators, such as the Ministry of Finance, the National Bank of Ukraine (NBU), and the National Securities and Stock Market Commission (NSSMC) will have their own responsibilities. For example, the NBU will provide oversight for stablecoins while the NSSMC will take care of crypto derivatives.​