Ukraine Prepares To Legalize Crypto

Ukraine plans to legalize crypto next year. (Photo; Doc. Texas Blockchain)

JAKARTA - A war-torn country, Ukraine, is currently preparing to legalize crypto by 2025. By legalizing crypto assets, Ukraine is expected to create clearer regulations for market participants. This step is getting stronger amid the economic constraints facing the country due to the ongoing war.

In a forum entitled "Domestic Investment Opportunities," Danylo Hetmantsev, Chairman of the Ukrainian Parliamentary Committee for Finance, Tax and Customs Policy, revealed that parliament is finalizing a bill on digital assets.

Hetmantsev stated that the bill, which was jointly developed by the National Bank of Ukraine and the International Monetary Fund (IMF), is planned to be passed in the first quarter of 2025.

"When it comes to crypto, the parliamentary working group is finalizing a bill for the first reading. I believe the text will be ready after the New Year. We plan to pass this law and legalize crypto in the first quarter of 2025," Hetmantsev said as reported by Ukrainska Pravda.

However, Hetmantsev insists that there will be no tax exemption for digital assets. On the other hand, the taxation model will follow the rules for securities, where profits will be taxed when the asset is converted into fiat currency. This approach aims to prevent potential tax evasion.

This is a continuation of previous efforts. In March 2022, President Volodymyr Zelenskyy signed an "On Virtual Assets" law which became the original legal framework for the digital asset market. However, the implementation of the law was delayed until 2024 due to the amendments required to the State Tax Code.

According to an IMF report, the lack of crypto regulation in Ukraine has the potential to threaten price stability and efficiency of monetary transmission. Therefore, this regulation is expected not only to increase international confidence in Ukraine, but also to have a positive impact on the national economy, including the potential turnover of funds of up to billions of hryvnia.

On the other hand, Ukraine has also received significant support from the global community through crypto donations since the Russian invasion in February 2022. Big names such as Vitalik Buterin and Justin Sun have donated millions of dollars in digital assets to help the country in times of war. Crypto legality is expected to be a strategic step forward for Ukraine in rebuilding their economy amid the ongoing crisis.