The Ukrainian government has just legalized cryptocurrency. The country’s president has signed into law a bill that legalizes the digital currency sector in the Eastern European nation that is currently at war with Russia. This decision comes at a time when the country has already received over $100 million in crypto donations from people and groups from all over the world to support its war effort. Blockchain development is beneficial to cryptocurrency investors. So, if you are planning to trade or mine Bitcoin, then you may visit bitcoinup.
What Does the Law Mean?
President Volodymyr Zelenskyy signed the bill that was passed by the country’s parliament last month. The law lays down the conditions for the creation of a legal market for digital assets within Ukraine.
- The National Commission on Securities and Stock Market and the National Bank of Ukraine has become the financial regulators for the crypto sector
- Ukrainian banks can now open accounts for cryptocurrency firms
- Every altcoin or other crypto-related companies handling digital assets will have to register with the authority
- Crypto holdings of citizens will be protected under the same legal terms as the national fiat currency
Both Ukrainian and foreign crypto exchanges can now run legally in the country once they are registered.
Role of Cryptocurrencies in the Russia-Ukraine Conflict
From the very start of the war, crypto emerged as a powerful tool for Ukraine’s government and non-profit organizations to support some of their war and humanitarian efforts. Within three weeks of the war starting, Ukraine’s overall crypto accumulation for the defense of the country stood at $54 million. So far, the overall donations are expected to have exceeded $100 million.
Ordinary Ukrainian citizens have also been found purchasing cryptocurrencies. The trading on the country’s domestic exchange has increased by 200%. However, swapping digital assets for fiat currency continues to be difficult. With the Ukrainian government having made the crypto sector legal, people are expected to find it easier now to invest in or convert cryptos.
However, it is not just the Ukrainians that are benefiting from crypto. It is also seen as becoming an increasingly meaningful tool in the hands of Russians who have been hit by the West’s economic sanctions.
Ukraine’s New Cryptocurrency Regulation
It was almost a month ago that the Ukrainian parliament passed a bill for the legalization of crypto. It laid down the framework for the management and regulation of digital currencies, NFTs, and other blockchain-based technology. The country’s president has recently signed the bill to transform it into law. The country has named this bill, On Virtual Assets. It creates a legal framework for the nation to run a regulated cryptocurrency market.
At the time of the bill’s passing by the parliament, the president had vetoed and delayed it. His reasoning was to wait until the formation of a new regulatory agency for crypto management. This led to the National Securities and Stock Market Commission being empowered with the following powers:
- Creating Ukraine’s national policies for virtual assets
- Issuing licenses to firms dealing with crypto and other digital assets
- Acting as the nation’s central financial watchdog
Crypto Use in Ukraine Before the Recent Regulation
Many believed that cryptocurrency was already legal in Ukraine. This was because Ukrainians were already active users of cryptos. In fact, available reports show that people on both sides of the conflict have been actively investing in and trading cryptos since the fall of 2020.
There are a number of factors that have got Ukrainians so much involved in crypto assets. The most noticeable reasons include:
- A generally tech-native population
- A conducive environment for industrial startup
As the new law comes into place, every altcoin and Bitcoin Trading Platform in the country will no longer be limited to assisting with spending the crypto donations. They can now also help with converting digital assets to fiat currency. It is also worth knowing that the Ukrainian government has partnered with a Bahamas-based trading platform to convert its crypto donations into fiat. This money will then be deposited at the National Bank of Ukraine.
The new On Virtual Assets law seems to have been rushed through by the Ukrainian government. According to the Ukrainian officials, the law for the regulation of digital assets wasn’t expected to go through so quickly. At the time, Ukraine was ‘touted’ by the New York Times as “The Crypto Capital of the World” even without proper regulation in place. The country even has a Ministry of Digital Transformation and according to its deputy minister, Ukraine intends to become one of the biggest attractions for the world’s crypto firms by creating the perfect jurisdiction for digital assets.