Ukraine isn't making Bitcoin legal tender, but it is making it easier to work with cryptocurrency in the country.
Cryptocurrencies may soon be recognized by the law in Ukraine as the country’s parliament adopted Bill No. 3637 "On Virtual Assets" on Wednesday.
According to local news agency Ukrinform, 276 deputies voted in support of the bill.
The Virtual Assets Bill seeks to create a mechanism for the legal regulation of cryptocurrencies in Ukraine, Europe’s second-largest country by size. The move could trigger a new wave of adoption in the cryptocurrency industry if it eventually becomes law. For one, international blockchain companies will be able to register and operate freely in the country. Citizens can also receive income from cryptocurrency transactions.
An explanatory note to the bill said:
"The law regulates legal relations arising in connection with the turnover of virtual assets in Ukraine, defines the rights and obligations of participants in the virtual assets market, and the principles of state policy in the field of virtual assets turnover [...] Ukrainians will be able to tokenize property rights and will receive the judicial protection of rights to virtual assets."
It is worth mentioning that the bill does not seek to make cryptocurrencies a medium of exchange, as in the case of El Salvador. However, citizens can legally own, trade and exchange cryptocurrencies.
In addition to legalizing cryptocurrencies, the bill also seeks to offer legal protection to industry participants. In particular, it defines the list of professional service providers in the cryptosphere and their associated registration. Crypto companies who wish to operate in Ukraine must obtain a permit, have a proven track record and disclose information about their ownership structure. Similarly, issuers of ICOs and IDOs are mandated to disclose vital information about their offerings.
In general, Ukraine’s Virtual Assets Bill appears to be bringing much-needed sanity to the cryptocurrency space. The proposal introduces anti-money laundering measures and enforces strict KYC requirements. It also synchronizes the country’s laws with the standards of the FAFT and other AML bodies.
The Ministry for Digital Transformation of Ukraine and the Committee on Digital Transformation of Ukraine have been tasked with the responsibility of regulating the cryptocurrency market. And in some cases, the National Bank of Ukraine and the National Securities and Stock Market Commission can exercise some regulatory oversight on the sector.
Commenting on the development, Alex Bornyakov, Deputy Minister of Digital Transformation for IT Development, said:
“Cryptocurrency owners will get several advantages. Because there will be a legal base for cryptocurrencies, they will be able, at least, to protect their virtual fortune if something happens. They also will be entitled to exchange crypto assets and declare them. This process will be completely “transparent.”
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