The Ukrainian parliament has backed a bill to legalize cryptocurrencies. In a nearly unanimous vote, the Ukrainian Parliament adopted the law that was set in motion in 2020.
Unlike El Salvador, Ukraine’s crypto law does not facilitate the rollout of bitcoin as a form of payment, but plans to open the cryptocurrency market to businesses and investors.
Previously, Ukrainian locals were allowed to buy and exchange virtual currencies, but companies and exchanges dealing in crypto were often under close watch. This new law will give reassurance to businesses, unlike before, when they were operating in a legal gray area.
Ukraine’s parliament previously passed a law legalizing cryptocurrency last September, but President Volodymyr Zelenskyy vetoed the bill the following month.
This week, the official government portal announced the new law – launching a legal market for virtual assets in Ukraine. The law, which defines the clear rights and duties of all market participants, will mean that crypto will become adopted significantly more in peoples’ day to day lives.
The Ukraine has already been a big adopter of crypto and the technology behind it. In fact, according to the New York Times, the Eastern European country processes more transactions per day in cryptocurrency than it does in its fiat currency, the hryvnia. With this new law, the Ukraine has now turned into a leading hub for crypto industries within Europe.
Anto Paroian, Chief Operating Officer at digital assets investment fund ARK36 says:
“Ukraine’s balanced approach to regulating crypto shows that the adoption of digital assets on a national level doesn’t have to be a zero-sum game. On the one hand, legislators don’t have to unnecessarily restrict citizens from accessing this promising asset class in order to put in place appropriate investor protection. On the other hand, crypto enthusiasts don’t need to fear regulation or see it as necessary evil only. As shown by Ukraine, regulation done appropriately can benefit the interests of both parties by enhancing crypto adoption and providing tangible economic advantages.”
The new adoption, so far, has not had a significant or positive impact on the market yet. Instead, due to the increased tension between Russia and Ukraine, global markets tumbled last week, with Bitcoin dropping by almost 10%. All eyes are on the Russia-Ukraine situation for any short-term relief in the market. Ironically Russia remains one of Ukraine’s largest partners in trade, and the Russian central bank is developing its own digital currency, but is also pushing for a ban on other cryptocurrencies.