The Ukrainian authorities have adopted a law that should regulate the circulation and use of cryptocurrencies.
In February, the Verkhovna Rada of Ukraine approved the law “On Virtual Assets”, and on Wednesday, March 16, the Ministry of Digital Transformation of Ukraine announced that President Volodymyr Zelensky had signed it. The law is intended to create conditions for the legal use of cryptocurrencies on the territory of Ukraine. The National Securities and Stock Market Commission of Ukraine (NSSMC) and the National Bank of Ukraine (NBU) will be responsible for regulating the digital asset market. The law defines the legal status and ownership of virtual assets, establishes registration requirements for virtual asset service providers (VASPs), and provides for transaction monitoring.
The National Securities and Stock Market Commission will determine the rules for the circulation of digital assets in the country and issue VASP licenses to carry out activities. Also, the duties of the department will include the formation and implementation of state policy in relation to crypto assets. Previously, the Ministry of Digital Development of Ukraine was engaged in the development of regulation in this area. Now the Ministry of Digital Development will work on amendments to the Tax and Civil Codes for the full implementation of virtual assets. The Law “On Virtual Assets” will come into force after amendments to the Tax Code, reflecting the specifics of the taxation of cryptocurrencies.
“Ukraine has legalized the cryptocurrency sector — Volodymyr Zelensky signed the relevant law. Now foreign and Ukrainian cryptocurrency exchanges will work legally, and banks will be able to open accounts for them. This is an important step towards the development of the virtual asset market in Ukraine,” the Ministry of Digital Transformation of Ukraine tweeted.
Deputy Prime Minister and Minister of Digital Transformation of Ukraine Mykhailo Fedorov added that since the outbreak of hostilities, crypto assets have become a powerful financial tool to help attract additional funding to support the armed forces. Over the past three weeks, Ukraine’s cryptocurrency fund has raised more than $54 million in digital assets. Therefore, the signed law will “bring out of the shadows” the cryptocurrency sector, Fedorov said.
Fedorov proposed legalizing cryptocurrencies back in 2019. In 2020, the National Anti-Corruption Bureau of Ukraine (NAPC) introduced the rules for declaring cryptocurrencies as intangible assets.
