Ukraine Passes Law To Recognize And Regulate Crypto

Ukraine, approves the law governing cryptocurrencies. (photo: doc. unsplash)

JAKARTA - The Ukrainian parliament has adopted a law regulating foreign and domestic cryptocurrency exchanges operating from within the country.

On Wednesday, September 8, the Ukrainian Parliament adopted the draft law “On Virtual Assets”, which legally recognizes cryptocurrencies in the country for the first time. The law builds on existing standards developed by the intergovernmental policy-making organization, the Financial Action Task Force on Money Laundering (FATF).

Ukraine's Ministry of Digital Transformation will be tasked with overseeing the implementation of new virtual asset regulations and guiding the growth of the industry, by "international standards".

Anastasia Bratko of the Ministry of Digital Transformation said the law allows companies to launch a virtual asset market in Ukraine and allows banks to open accounts for crypto companies.

“Ukrainian citizens will also be able to declare their income in virtual assets”, she said, adding that the law “guarantees judicial protection of the rights of virtual asset owners”.

The announcement from the ministry emphasized that the state will receive additional tax revenue for the budget, which will be paid by crypto companies.

“The adopted norms set the rules for service providers related to the circulation of virtual assets and contribute to the removal of market shadows”, said Bratko.

Virtual asset service providers (VASPs) “must have an impeccable business reputation” and will be required to disclose their ownership structure to identify their primary beneficial owner. Internal anti-money laundering measures must also be maintained by the VASP.

Deputy Minister of Digital Transformation of Ukraine, Oleksander Bornyakov, highlighted the provisions contained in the law to attract “forex to the Ukrainian market”.

“This will be a strong incentive for the further development of the crypto-sphere in Ukraine. Banks will open accounts for them and make transactions with new asset classes. I am sure that society, business, and the state will benefit from the legalization of the new economic sector”, Bornyakov said.

Last month, Mikhail Fedorov, Deputy Prime Minister of Ukraine and head of the country's Ministry of Digital Transformation, revealed that his ministry is exploring using a Central Bank Digital Currency (CBDC) to make payroll payments in early trials of the technology.

Ukrainian President Volodymyr Zelenskyy signed a law allowing the country's central bank to issue CBDCs in July.