- Ukraine’s new
cryptolaw was passed by Parliament a day after El Salvadorofficially accepted Bitcoin as legal tender.
- However, Ukraine isn’t going as far as El Salvador — Bitcoin is legal, but not legal ‘tender’.
- More importantly, the law in Ukraine gives people protection against cryptocurrency scams and frauds.
Ukraine has become the fifth country to officially regulate cryptocurrencies and recognise Bitcoin as a legal financial asset. And, while
cryptocurrencies are now legal in Ukraine, they’re not quite legal ‘tender’.
This means the country’s new law doesn’t quite put Bitcoin, or any other cryptocurrency, on the same footing as the country’s national currency, hryvnia. It is, nonetheless, a milestone. The law pulls the
crypto craze out of the ‘fear, uncertainty and doubt (FUD)’ of being in a legal grey area.
More importantly, the law holds the potential to facilitate the workings of crypto exchanges and lay down protections for those who own
crypto and might be susceptible to frauds.
“The development of a new industry will allow attracting transparent investments and will strengthen the image of our country as a high-tech state.”
Mykhailo Fedorov, Ukraine’s vice prime minister of digital transformation, told the press
On September 8, the Ukrainian Parliament introduced its crypto bill that allows the government to regulate virtual assets and create an official industry out of the crypto space. Crypto activity in the country, like most others including India, has been neither illegal nor legal so far.
The only thing that’s pending is the President’s sign off to bring the law into force.
Ukraine’s new crypto law passes with unprecedented support
What’s worth noting is that Ukraine’s new crypto law, which was set in motion in 2020, passed by an almost unanimous vote in Parliament. This is a big change of sorts, considering that the country’s regulators have often been at odds with crypto firms in the past. Law enforcement agencies, like the Security Service of Ukraine (SBU) have taken steps against crypto firms as recently as August this year.
Now, after 276 Parliamentarians voted for the bill, the country plans to “open the cryptocurrency market for business and investors” by 2022, a spokesperson from the Ministry of Digital Transformation told
What does cryptocurrencies being legal mean for Ukraine?
As mentioned before, the law doesn’t allow
Bitcoin, Ethereum or any other cryptocurrency to be used as legal tender. Instead, it spells out terminology that’s common in the crypto space. This is important for regulators around the world, since terms like private keys, digital wallets etc. are common parlance in the crypto and fintech space today, but rarely find definition in our laws.
The draft bill will also “legalise relations arising in connection with the turnover of virtual assets in Ukraine, defines the rights and obligations of participants in the virtual assets market, the principles of state policy in the field of virtual assets”, which
means it will protect against possible crypto frauds.
Concerns after El Salvador
While Ukraine’s moves to legitimize crypto will come as good news for the industry, there have been concerns too. The law was passed a day after El Salvador officially accepted Bitcoin as legal tender and its price consequently fell by 11.7%. Fortune
reported that protests erupted across the country after the bill was passed.
To be fair, the law hasn’t officially been passed yet. After the Parliament, it goes to Ukraine’s President, Volodymyr Zelenskyy now, who could theoretically choose not to sign it.
For a more in-depth discussion, come on over to Business Insider Cryptosphere
— a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.