A month ago, Ukraine’s parliament passed a bill to legalize cryptocurrency, preparing a framework for the regulation and management of cryptocurrencies like Bitcoin. Today, the country’s president, Volodymyr Zelenskyy, signed into law that bill, named “On Virtual Assets,” which establishes a legal framework for the country to operate a regulated crypto market.
According to reports coming out of Cointelegraph, Coindesk and other digital asset-focused outlets, crypto exchanges and firms handling digital assets will be required to register with the government to operate legally in Ukraine, and banks will be allowed to open accounts for crypto firms.
The law also reportedly empowers Ukraine’s National Securities and Stock Market Commission with the ability to determine the country’s policies on digital assets, issue licenses to businesses dealing with crypto, and act as a financial watchdog. (Indeed, Ukraine’s parliament previously passed a law legalizing cryptocurrency back in September, but President Zelenskyy vetoed the bill soon afterward, saying the country couldn’t afford to stand up a new regulatory body for managing crypto.)
If you thought crypto was already legal in Ukraine, you have plenty of company. Even without formal regulation, Ukrainians, Russians and Venezuelans (in that order) had become among the active retail users of digital currencies by the fall of 2020, according to a blockchain analysis outfit Chainalysis.
At the time, Chainalysis’s head of research told Coindesk suggested a few trends were driving Ukraine’s rise to the top, including a “really tech-native population,” and “industrious startup environment.” (Coindesk also noted that there is also more cybercrime activity in Eastern Europe than in other regions, which likely also played a role.)
The types of regulations that were just passed into law have taken on new urgency with Ukraine receiving at least $100 million in crypto donations in the weeks since Russia invaded the country and began killing soldiers and civilians alike, prompting an estimated three million people to flee the country of 42 million. (NPR just likened the number of Ukrainian refugees who have fled to Poland alone — roughly 1.8 million — to the population of Warsaw.)
With the new law in place, Ukraine’s first crypto exchange, Kuna, will no longer be limited to helping the country spend the donations directly with crypto-friendly suppliers but to convert crypto to much-needed fiat. In the meantime, the country has also partnered with the Bahamas-based exchange giant FTX to convert crypto contributions to Ukraine’s war effort into fiat for deposit at the National Bank of Ukraine.
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