Bitcoin is now legal in Ukraine as its parliament approved in final reading a bill that caters to the president’s recommendations. However, the country has not made bitcoin a legal tender.
“The new law is an additional opportunity for business development in our country. Foreign and Ukrainian crypto companies will be able to operate legally, and Ukrainians will have convenient and secure access to the global market for virtual assets,” Mykhaylo Fedorov, Ukrainian minister of digital transformation, said in a statement.
The parliament passed the new Law of Ukraine on Virtual Assets on Thursday with more than 270 votes, according to an official statement. The bill details requirements that Bitcoin service providers such as exchanges should abide by and determines fines for violations of the law’s provisions, in addition to determining that the country’s National Securities Commission regulate the cryptocurrency market.
Ukraine’s Securities Commission will be tasked with issuing permits to Bitcoin and cryptocurrency service providers and carrying out supervision and financial monitoring of the market, the statement said.
Ukraine had introduced a similar cryptocurrency bill in September, but President Volodymyr Zelensky vetoed it in the following month arguing that the country couldn’t afford to create a new regulatory body specifically for Bitcoin and cryptocurrency.
President Zelensky then returned the bill to the Ukrainian parliament along with his suggestion to let existing regulators oversee the burgeoning sector. Now, parliament has incorporated his recommendations and passed the amended bill.
“The Law on Virtual Assets is largely a framework law and requires further substantial refinements, for instance, changes to the tax code,” Serhiy Tron, founder of White Rock Management and the Parea Foundation international fund, told Bitcoin Magazine. “Nevertheless, the document became an important signal to the global community since the National Bank of Ukraine officially stated that digital currency is a ‘monetary surrogate, which has no real value.'”
Tron said that Ukraine’s Ministry of Digital Transformation plans to make the country a leader in the global Bitcoin and cryptocurrency market, which the new law facilitates.
“By creating a high-tech, innovative cryptocurrency market that plays by clear rules, the country expects the speedy arrival of crypto investors from all over the world,” he added.
Ukraine’s Bitcoin bill enables the peer-to-peer currency to emerge out of a “gray” zone with the establishment of clear-cut legislation that encompasses how the asset should be treated legally and how institutions should behave when it comes to investor protection and assurances.
Tron said that now bitcoin exchanges will be able to work under clear rules and citizens’ assets will be better protected against fraud or misuse by service providers, including custodians.
“Adopting the Law on Virtual Assets clearly signals to the global community that cryptocurrency is legalized in Ukraine,” Tron told Bitcoin Magazine. “The opportunity to legally develop business in Ukraine will attract crypto-investors from all over the globe to our country.”