Ukraine to Legalize Cryptocurrencies Under Zelensky
October 13, 2019
Ukraine to Legalize Cryptocurrencies Under Zelensky
October 13, 2019

The new administration in Kyiv, headed by Volodymyr Zelensky, the young president, has brought renewed interest in cryptocurrencies. Fresh energy is now being injected into efforts to legalize decentralized digital money and regulate related economic activities. New draft laws have been proposed or are under preparation to accommodate the nascent industry, from which the Government of Ukraine expects increased budget revenues.

Ukraine’s Ministry of Digital Transformation plans to legalize cryptocurrencies such as bitcoin cash (BCH) and bitcoin core (BTC). However, the initiative to accomplish this comes directly from Mikhail Fedorov – its current head, and Alexander Bornyakov – the IT entrepreneur.  

The ministry is already working on a new bill that should be ready by the end of the year and preparing amendments to the country’s tax code.

However, Bornyakov pointed out that although cryptocurrencies in Ukraine are not banned, they currently do not have any official status. Their legalization is necessary for the part to protect businesses dealing with coins from police searches, emphasized the 37-year-old entrepreneur from Odessa. President Zelensky, a former popular comedian and TV producer, is preparing to appoint a new Governor of the province this week, 36-year-old crypto millionaire Maxim Kutsiy.

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Likewise, the new generation of politicians that took over power in Kyiv after the last presidential and parliamentary elections, inherited a country facing numerous challenges. These include a depreciating hryvnia and an unresolved military conflict in the East.

Allowing the promising crypto industry to flourish will undoubtedly translate into increased budget receipts. Bornyakov and his colleagues think that it’s time for these companies to come out of the grey sector.

Volodymyr Zelensky, President of Ukraine

Plans to Legalize Mining and Create Crypto Valley

People from Ukrainian society are now involved in the efforts to create regulatory certainty for the crypto industry. Representatives of the Ministry of Digital Transformation, Ukraine’s parliament (Verkhovna Rada), the non-government Better Regulation Delivery Office (BRDO), industry organizations, and businesses gathered recently to adopt a dedicated program to do that.

The meeting was organized by a parliamentary group called “Blockchain4Ukraine” which unites lawmakers from different political factions.

The document details steps that the government and private sector needs to take to achieve the set goal. These include legalizing mining, attracting international crypto-asset exchanges to Ukraine, and developing the legal terminology needed to regulate the sector. Adopting amendments to the existing law “On Public Ledgers,” implementing FATF standards regarding money laundering as well as the integration of blockchain technologies into government registries are also part of the strategy.

National Bank of Ukraine

However, the new management of the National Bank of Ukraine supported these efforts. It has been reported by Forklog that Mikhail Vidyakin, the acting director of the central bank’s Reform Strategy Departmentcommented on Facebook that the legislation necessary to regulate the crypto industry should be adopted in the shortest possible time. He believes that authorities must “find the courage” to do that within six to nine months after the approval of the new strategy and noted that Malta’s experience proves this is possible.

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Thus, a number of established local companies with regional importance, such as Exmo and Kuna –  the crypto exchanges, can form its core as they already have millions of users. But even until that happens, the popularity of cryptocurrencies in the country is likely to continue to grow.

So, according to a survey among internet-savvy Ukrainians conducted last year, 13% of the respondents admitted they owned digital coins.



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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with experience of 1.5 years. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space. She loves writing about blockchain and other blockchain-related articles.