The Kyiv parliament has adopted legislation that will govern crypto-related operations within Ukraine. “On Virtual Assets” is a law that recognizes cryptocurrency as an intangible good, but denies them legal tender status. It regulates the obligations and activities of crypto-businesses.

Ukraine Legalizes Crypto Activity, Defines Virtual Assets

Ukraine’s Verkhovna Rada, the country’s parliament, has adopted the law “On Virtual Assets” on second and final reading. This legislation governs cryptocurrency operations in Ukraine. Deputies passed the bill with a large majority of 276 votes out of 376 present MPs, with only six voting against the motion.

The long-awaited law will come into effect after lawmakers approve amendments in the country’s tax code that deal with the taxation of cryptocurrency transactions. The Ukrainian legislature is yet to vote on these changes, Forklog noted in its report on the development.

The new law recognizes virtual assets as intangible good, which can be secured or unsecured. However, cryptocurrencies will not be accepted in Ukraine as legal payment methods and they will not be exchanged for any other goods or services.

The law also defines “financial digital assets”, which must be issued by Ukrainian entities. If these assets are backed with currencies, they will need to be regulated and supervised by the National Bank of Ukraine. The National Securities and Stock Market Commission, (NSSMC), will regulate underlying assets that are securities or derivatives.

Crypto Market participants will be able independently to determine the value and open bank accounts to settle transactions. They can also seek judicial protection for any associated rights. The country’s anti money laundering regulations are enforced on service providers. They also prevent terrorist financing through their platforms.

The current Ukrainian authorities maintain a positive attitude toward the country’s growing cryptocurrency industry. This was confirmed by officials of the executive power this week. During a visit to the U.S., President Volodymyr Zelensky highlighted the importance of launching a legal digital assets market which he described as a “development vector” of the nation’s digital economy. Mykhailo Fedorov (Minister of Digital Transformation in Ukraine) said that the country is striving to be a desirable jurisdiction for crypto companies.

The Rada voted the draft law “On Virtual Assets”, on its first reading last December. After introducing a number of changes, lawmakers presented a revised version of the document in June of this year. After criticism from NBU and NSSMC regulators, the bill was amended again with the authors taking into consideration concerns raised by other government agencies.

Do you think Ukraine’s business climate will improve for crypto companies following the adoption of the virtual assets law? Please share your thoughts in the comments below.

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