Ukraine has passed legislation that establishes a legal framework for the country's cryptocurrency business.
According to the country's Ministry of Digital Transformation, the bill, which was passed by Ukraine's parliament last month and signed into law by President Volodymyr Zelenskyy on Wednesday, will allow foreign and Ukrainian cryptocurrency exchanges to operate legally.
Banks will be permitted to open accounts for cryptocurrency startups.
Ukraine has legalized the crypto sector — @ZelenskyyUa signed a law. From now on foreign and Ukrainian cryptocurrencies exchanges will operate legally and banks will open accounts for crypto companies. It is an important step towards the development of the VA market in Ukraine. pic.twitter.com/lqqO1J9r1k
— Міністерство цифрової трансформації України (@mintsyfra) March 16, 2022
The legislation governing "virtual assets" governs the legal status, classification, and ownership of virtual assets. It also includes financial management tools for virtual assets.
The market will be regulated by Ukraine's National Securities and Stock Market Commission. The agency will be in charge of things like giving licenses to cryptocurrency businesses and enforcing governmental regulations in the field.
As Russia's invasion of Ukraine continues, Zelenskyy has signed the law, emphasizing the significance that cryptocurrencies have played during the crisis.
Ukraine began taking donations for its military defense against Russia using digital currencies such as bitcoin and ether last month. According to blockchain analytics firm Elliptic, it has subsequently expanded the number of cryptocurrencies that it takes for donations and has raised more than $63 million.
Ukraine's government opened an official website earlier this week where people all around the world can donate using bitcoins. The funds will be used to support Ukraine's military and humanitarian initiatives.
Global regulatory pressure
Ukraine's cryptocurrency law comes at a time when countries around the world are debating how to regulate the industry, often in conflicting ways.
El Salvador, for example, has made bitcoin a legal currency and is attempting to establish the country as a crypto hub. China, on the other hand, has sought to eliminate cryptocurrency trade and mining.
This month, US President Joe Biden signed an executive order directing federal agencies to take an uniform approach to digital asset regulation and oversight. The executive order is not a piece of law intended to govern the bitcoin business.
Governments in numerous countries, like Ukraine, where there is no explicit cryptocurrency law, have pushed to put exchanges and other digital asset enterprises under the purview of financial regulators. In the United Kingdom, for example, bitcoin exchanges must register with the Financial Conduct Authority and are subject to existing money-laundering regulations.
In contrast, Ukraine's strategy aims to create a law that is specifically adapted to the digital asset market.
