Ukrainian Parliament Passes Law Legalising Cryptocurrencies

A draft law legalising and regulating cryptocurrencies and other virtual assets like tokens in Ukraine has passed the parliament in the second reading on September 8. A total of 276 Ukrainian lawmakers voted for the bill.

Cryptocurrencies have been neither legal nor forbidden in Ukraine because there were no laws that defined them. Ukrainians could buy and exchange virtual currencies, but local courts could not protect them if something went wrong.

If signed by President Volodymyr Zelensky, the law will protect the owners of virtual assets and exchange platforms from fraud. It will also determine how Ukraine will regulate the cryptocurrency market in the future.

Cryptocurrency is hugely popular among Ukrainians — the daily turnover of virtual assets in the country accounts for $37,000, according to Mykhailo Fedorov, Ukraine’s Minister of Digital Transformation. If cryptocurrency becomes legal and therefore safer, more Ukrainians will invest in it, Fedorov said.

“Only a few countries in the world have legalized crypto assets — Germany, Luxembourg, Singapore. Ukraine will be one of them,” he added.

Recognising cryptocurrency is vital for the booming industry, experts said. “It will reduce stereotypical attitudes towards cryptocurrencies and will help them to become normal financial instruments,” according to Oleg Kurchenko, CEO of virtual asset exchange platform Binaryx.

However, experts are worried that too many rules could stifle innovation and put pressure on businesses. Some crypto investors could leave the country because they do not trust state initiatives, Kurchenko said.