Ukraine passes law to recognize and regulate crypto
Ukraine’s parliament has passed legislation regulating foreign and domestic cryptocurrency exchanges operating out of the country.
On September 8, the Ukrainian parliament passed the “Virtual Assets” bill, legally recognizing cryptocurrency in the country for the first time. The legislation is based on existing standards developed by the intergovernmental policy-making organization, Financial Action Task Force on Money Laundering (FATF).
The Ukrainian Ministry of Digital Transformation will be responsible for overseeing the implementation of the new regulation of virtual assets and guiding the growth of the industry, in accordance with “international standards”.
Anastasia Bratko of the Ministry of Digital Transformation said the law allows companies to launch virtual asset markets in Ukraine and allows banks “to open accounts for crypto companies.
“Ukrainians will also be able to declare their income in virtual assets,” she said, adding that the law “guarantees judicial protection of the rights of owners of virtual assets.”
An announcement from the ministry pointed out that “the country will receive additional tax revenue from the budget, which will be paid for by crypto companies,” adding:
“The adopted standards establish rules for service providers related to the circulation of virtual assets and contribute to market obscuration.
Virual asset service providers (VASP) “must have an impeccable business reputation” and will be required to disclose their ownership structure to identify their ultimate beneficial owners. Internal anti-money laundering measures must also be maintained by the VASPs.
Ukrainian Deputy Minister of Digital Transformation Oleksander Bornyakov highlighted the provisions contained in the legislation aimed at attracting “foreign currency to the Ukrainian market”, adding:
“It will become a powerful incentive for the further development of the crypto-sphere in Ukraine. Banks will open accounts for them and transact with a new asset class. I am sure that society, business and the state will benefit from the legalization of the new sector of the economy.
Last month, Mikhail Fedorov, Ukrainian Deputy Prime Minister and head of the country’s Digital Transformation Ministry, revealed that his ministry is exploring the use of a central bank digital currency (CBDC) to make wage payments in a first pilot of the technology.
Ukrainian President Volodymyr Zelenskyy signed a law allowing the country’s central bank to issue a CBDC in July.