Ukraine Legalizes Bitcoin (BTC) and Cryptocurrencies

In recent weeks, there has been plenty of crypto chatter from the Russian government and the Bank of Russia. Bank of Russia proposals for an outright ban on cryptos and crypto mining had caught the markets off-guard. More favorable comments from the Russian government, however, eased market stress.

The September Veto

For the Ukraine, sentiment towards Bitcoin (BTC) and the broader crypto market has been more favorable. Back in September of last year, the government had introduced a crypto bill only for the Ukrainian President Volodymyr Zelensky to veto it shortly afterwards.

The Bill, legalizing and regulating Bitcoin, only had 6 votes against and 276 votes in favor. According to the Kyiv Post, the President vetoed the Bill and sent it back to Parliament for changes. President Zelensky cited a lack of funds in the budget to meet the regulatory oversight requirements of the Bill.

The previous bill had stated that “the virtual assets market would be regulated by the Ministry of Digital Transformation, the National Bank of Ukraine (NBU), the National Securities Commission (NSC) and a new independent regulatory body that would have to be created“.

Aligned with other central banks, however, the National Bank of Ukraine (NBU) saw virtual assets as a source of potential risk. While also seeing the benefits, risks included money laundering and the financing of illegal activities. The NBU also saw the use of virtual assets over traditional bank products and fiat currency as another risk.

Bitcoin Legal at the 2^nd Time of Asking

On Thursday, the Ukrainian Parliament approved the legalization of Bitcoin for a 2^nd time. According to the government portal, the Verkhovna Rada supported the President of Ukraine’s amendments to the “Law on Virtual Assets”. 276 members of Parliament (MPs) voted in favor of the amendments. The new bill places the regulation of virtual assets in the hands of the National Commission on Securities and Stock Market.

The National Commission on Securities and Stock Market will be tasked with:

• Virtual assets policy.
• Order of circulation of virtual assets.
• Issuance of permits to virtual asset service providers.
• Supervision and financial monitoring of virtual assets.

According to the Ukrainian government, Ukraine sits in the top 5 globally by the total number of crypto users. The government sees the adopted law as a gateway to becoming “a leading country for business development in this innovative field”.

It is worth noting, however, that the vote does not make Bitcoin legal tender. Currently, El Salvador is the only country that has adopted Bitcoin as legal tender.