Ukraine is the fifth country to introduce basic regulations on virtual currencies in recent weeks, a sign that governments are slowly recognizing the existence of this currency.
|Ukraine’s parliament has passed a law legalizing and regulating virtual currencies.|
In an almost unanimous vote, the Ukrainian Parliament passed a law legalizing and regulating virtual currencies. The law was launched in 2020 and is being moved to the desk of President Volodymyr Zelensky.
Until now, virtual currency in Ukraine is still in the legal “gray zone” (referring to the problem of not having clear regulation.Ukrainian people are allowed to buy, sell and exchange virtual currency, but companies and exchanges are not allowed to buy and sell virtual currencies.) Cryptocurrency transactions are often closely monitored by law enforcement.
According to the Kyiv Post, Ukrainian authorities often take an objectionable stance when it comes to virtual currencies, claiming that virtual currencies are “scams” and “defeat” businesses related to this currency.
Last month, the Security Service of Ukraine (SBU) intercepted a network it called a “secret crypto exchange” operating in the capital Kyiv, claiming that exchanges like these are tolerating money laundering and anonymous trading.
The new Ukrainian law will provide certain protections against fraudulent activities by owners of Bitcoin and other virtual currencies. And for the first time, Ukrainian lawmakers have embarked on defining core terminology in the world of virtual currency.
If the law is signed by the President of Ukraine, virtual assets, electronic wallets, and personal encryption are the terms that will be included in Ukrainian law.
Not yet recognized Bitcoin is a fiat currency like El Salvador, Ukraine’s virtual currency law has not yet facilitated the use of Bitcoin as a form of payment, nor has it placed this virtual currency on par with the national currency Hryvnia.
According to Kyiv Post, by 2022, Ukraine plans to open the virtual currency market to businesses and investors. Top Ukrainian government officials also introduced the potential cryptocurrency market to Silicon Valley investors and venture capital funds.
During an official state visit to the US last month, President Zelensky mentioned Ukraine’s budding “legal market for virtual assets” as an investment destination. And Mykhailo Fedorov, Ukraine’s Minister of Digital Transformation, said that the country is modernizing the payment market so that the Central Bank of Ukraine can issue digital currency.
For Bitcoin advocates like Jeremy Rubin, CEO of Bitcoin Judica Research and Development Department, the new Ukrainian law and political messages like the above have not had much of an impact on the cryptocurrency market.
“The improved regulatory status for Bitcoin in Ukraine is a commendable sign that we are moving towards a world that respects individual rights globally,” commented Jeremy Rubin. “However, it is only symbolic – Bitcoin does not seek permission or forgiveness in its mission to protect the community from oppression by unjust governments.”
With the above move, Ukraine joins the list of countries that include Bitcoin in national law. Earlier, El Salvador became the first country to recognize Bitcoin as legal tender and officially circulated alongside the US dollar. El Salvador President Nayib Bukele has essentially tied his political fate to the results of this nationwide Bitcoin test.
Two weeks ago, Cuba also passed a law recognizing and regulating virtual currencies on the grounds of “socio-economic benefits”.
Last month, the US proposed rules for virtual currency “brokers” in a $1 trillion infrastructure investment bill. In Germany, the new law allows funds previously banned from investing in cryptocurrencies to allocate 20% of their resources to virtual currencies like Bitcoin.
Besides, Panama looks to be the next Central American country to introduce regulations for virtual currencies as the country is launching its own virtual currency bill.