While much of the world grapples with the development of crypto-related policy, Ukraine has become a first mover. The eastern European country has unveiled a path for the adoption of cryptocurrencies, with Ukraine’s Ministry of Economic Development and Trade beginning the process for the legalization of virtual assets, an endeavor that is projected to take three years. According to the announcement:
“The Economic Development Ministry initiates the adoption of the concept of state policy in the field of virtual assets, the purpose of which is to create understandable conditions for conducting activities in the field of virtual assets and virtual currencies.”
The government organization will set out to define key terms in the crypto space, including “virtual currency/cryptocurrency, virtual assets, ICO/ITO, mining, smart contracts and token,” according to local Ukrainian publication Ukrinform. In doing so, they will be giving developers and blockchain founders parameters for operating in the space, including the tens of thousands of crypto engineers that are engaged by Silicon Valley startups. It could also bolster the amount of international investment that is directed into Ukrainian blockchain startups. Crypto policy will be crafted over two stages that will unfold between now and 2021.
Fits and Starts
There have been greens shoots of crypto regulation in Ukraine for months, with one member of Parliament, Alexei Mushak, revealing in the spring that the path to the legalization of cryptocurrencies was in the works and at that time urging feedback from market participants. Mushak, who made the announcement on Facebook, held BTC as of 2016, according to public forums.
Ukraine Drafts Law to Legalize Cryptocurrencies, Fuels Debate In Crypto Community https://t.co/Sg7tUis7vj
— CCN (@CryptoCoinsNews) May 17, 2018
Mushak said at the time that the country was looking to establish transparency in the market, one in which blockchain development would be nurtured across sectors of the economy while holders of crypto would be protected from “unsubstantiated criminal prosecutions.” Meanwhile, the law will also be designed to fight fraud such as “money laundering and terrorism financing” that tends to be associated with an “underground” crypto market that was common in Ukraine under a different administration.
Regulatory clarity remains elusive in the blockchain space, and Ukraine is ahead of many jurisdictions in its efforts. Separately, there are a couple of crypto-friendly bills being considered, one of which would lift taxes on crypto-related business for at least a decade, incentivizing both businesses and individuals to transact in cryptocurrencies. Ukrainians trade nearly $2 million in cryptocurrencies daily across approximately two-dozen coins, and hundreds of local merchants already accept altcoins as a payment method.