Ukraine passes regulation to recognize and regulate crypto
After El Salvador’s welcoming of cryptocurrencies as legal tender, the Ukrainian Parliament has adopted a series of new legislation to regulate domestic and foreign crypto exchange operating from within the country.
On September 8, Ukraine’s Parliament adopted “On Virtual Assets”, the draft law that legalizes cryptocurrency as an accepted method of currency exchange for the first time. The regulation has been developed by the Financial Action Task Force on Money Laundering (FATF), an intergovernmental policy-making body.
As projected from initial reports, the Ukrainian Ministry of Digital Transformation will be given the charge of supervising the implementation of the new virtual asset. The Ministry would also guide the digital currency’s roadmap and industry goals in compliance with “international standards.”
Anastasia Bratko from the Ministry of Digital Transformation has stated that the law lets firms to launch virtual asset markets in Ukraine and allows banks to “open accounts for crypto companies.”
Bratko further added that now Ukraninans will also be able to declare their total income in virtual currency as the law guarantees the citizens “judicial protection of their rights.”
The Ministry has announced that Ukraine would now receive additional tax revenues to the budget. The new tax revenues would be paid by the country’s crypto businesses.
In an official circular, the Ukrainian Ministry of Digital Transformation has also said that Virtual asset service providers (VASPs) should register “an impeccable business reputation”, and that they would be mandated to disclose their ownership structures in order to identify their potential beneficiaries. VASPs must also keep a watch against internal anti-money laundering.
Oleksander Bornyakov, Ukraine’s Deputy Minister of Digital Transformation, highlighted that the new legislations contain portions that would attract “foreign exchange to the Ukrainian market,” adding that the legislation has the potential of making crypto markets in Ukraine “a powerful incentive for further development” in digital assets.
Mikhail Fedorov, the Ukrainian Deputy Prime Minister, had shared last month that as an early pilot of the technology, the country was exploring the central bank digital currency (CBDC) for initiating salary payments.